Power Integrations Inc (POWI)
Return on equity (ROE)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 32,234 | 55,735 | 170,851 | 164,413 | 71,176 |
| Total stockholders’ equity | US$ in thousands | 749,772 | 752,241 | 755,216 | 912,032 | 810,411 |
| ROE | 4.30% | 7.41% | 22.62% | 18.03% | 8.78% |
December 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $32,234K ÷ $749,772K
= 4.30%
Power Integrations Inc's return on equity (ROE) has shown significant fluctuations over the past five years.
In December 31, 2020, the ROE was at 8.78%, indicating that for every dollar of shareholders' equity, the company generated a profit of 8.78 cents. Subsequently, there was a notable increase in ROE to 18.03% by December 31, 2021, suggesting improved efficiency in generating profits from shareholders' equity.
The trend continued upwards in December 31, 2022, with ROE reaching 22.62%, reflecting a robust performance in utilizing equity to generate returns. However, there was a sharp decline in ROE to 7.41% by December 31, 2023, which may indicate challenges in maintaining profitability levels.
The most recent data point, December 31, 2024, shows a further decrease in ROE to 4.30%, signifying a significant drop in the company's ability to generate profits from shareholders' equity.
Overall, while Power Integrations Inc experienced periods of strong ROE, the recent downward trend raises concerns about the company's efficiency in utilizing equity to generate returns for shareholders. Further analysis of the company's financial performance and strategic decisions may be needed to address the declining ROE.
Peer comparison
Dec 31, 2024