Power Integrations Inc (POWI)

Operating return on assets (Operating ROA)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Operating income	US$ in thousands	17,929	35,059	180,412	175,058	70,487
Total assets	US$ in thousands	828,826	819,868	840,096	1,014,490	903,339
Operating ROA		2.16%	4.28%	21.48%	17.26%	7.80%

December 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $17,929K ÷ $828,826K
= 2.16%

Operating return on assets (Operating ROA) is a key financial ratio that measures a company's ability to generate profit from its assets utilized in operations. In the case of Power Integrations Inc, the trend in Operating ROA over the last five years shows fluctuations:

- As of December 31, 2020, Power Integrations Inc had an Operating ROA of 7.80%. This indicates that for each dollar of assets the company possesses, it generated a profit of $0.078.

- By December 31, 2021, the Operating ROA increased significantly to 17.26%, reflecting improved efficiency in asset utilization and profitability.

- The trend continued to rise in 2022, with Operating ROA reaching 21.48%, signaling strong operational performance and higher returns on assets.

- However, there was a significant decline in Operating ROA by December 31, 2023, dropping to 4.28%. This could suggest potential challenges in maintaining profitability relative to the level of assets employed in operations.

- The most recent data point, as of December 31, 2024, shows a further decrease in Operating ROA to 2.16%, which may indicate decreased efficiency in generating profit from assets or operational struggles.

Overall, the fluctuating trend in Power Integrations Inc's Operating ROA raises questions about the company's ability to consistently generate returns from its operating assets. Further analysis and investigation into the factors influencing these fluctuations may be necessary to understand the underlying dynamics impacting the company's operational performance.