Power Integrations Inc (POWI)

Operating return on assets (Operating ROA)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Operating income (ttm)	US$ in thousands	17,929	12,959	19,089	29,772	35,059	57,002	87,661	135,122	180,412	203,824	201,045	185,919	175,058	158,481	127,630	95,579	70,487	226,403	229,160	225,995
Total assets	US$ in thousands	828,826	824,991	804,760	805,776	819,868	865,490	859,457	851,405	840,096	837,963	809,004	919,195	1,014,490	1,004,990	967,849	944,719	903,339	876,068	853,777	827,439
Operating ROA		2.16%	1.57%	2.37%	3.69%	4.28%	6.59%	10.20%	15.87%	21.48%	24.32%	24.85%	20.23%	17.26%	15.77%	13.19%	10.12%	7.80%	25.84%	26.84%	27.31%

December 31, 2024 calculation

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

Operating Return on Assets (Operating ROA) is an important financial metric that indicates how efficiently a company is generating profits from its assets used in operations. For Power Integrations Inc, the operating ROA has fluctuated over the reported periods.

Between March 31, 2020, and June 30, 2022, Power Integrations Inc experienced a steady increase in its operating ROA, from 27.31% to 24.85%. This upward trend suggested that the company was efficiently utilizing its assets to generate operating profits.

However, starting from September 30, 2022, the operating ROA began to decline, reaching 1.57% by September 30, 2024. This suggests a decrease in the efficiency of asset utilization for generating operating profits during this period.

It is important for Power Integrations Inc to closely monitor and analyze the factors contributing to the declining trend in operating ROA to identify areas for improvement and implement strategies to enhance asset efficiency and profitability in the future.