Power Integrations Inc (POWI)

Return on total capital

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	35,059	180,412	175,058	70,487	217,022
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	752,241	755,216	912,032	810,411	724,546
Return on total capital		4.66%	23.89%	19.19%	8.70%	29.95%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $35,059K ÷ ($—K + $752,241K)
= 4.66%

The return on total capital for Power Integrations Inc. has fluctuated over the past five years. In 2023, the return on total capital was 4.66%, representing a significant decrease from 24.04% in 2022 and 19.19% in 2021. This decline suggests that the company may be less efficient in generating returns on the total capital employed during the most recent fiscal period. However, it is still higher than the returns in 2020 and 2019, which were 8.70% and 6.63%, respectively.

The varying trend in the return on total capital indicates possible changes in the company's profitability and efficiency in utilizing its total capital over the years. Further analysis of the underlying factors contributing to these fluctuations, such as changes in revenue, cost structure, or capital investments, would provide valuable insights into the company's financial performance and strategic direction.