Power Integrations Inc (POWI)

Financial leverage ratio

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Total assets	US$ in thousands	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	803,896	636,410	620,389	600,505
Total stockholders’ equity	US$ in thousands	752,241	785,057	767,929	762,302	755,216	750,282	710,245	820,573	912,032	908,356	870,344	853,823	810,411	779,797	759,472	743,830	724,546	565,328	543,865	531,301
Financial leverage ratio		1.09	1.10	1.12	1.12	1.11	1.12	1.14	1.12	1.11	1.11	1.11	1.11	1.11	1.12	1.12	1.11	1.11	1.13	1.14	1.13

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $819,868K ÷ $752,241K
= 1.09

The financial leverage ratio of Power Integrations Inc. has been relatively stable over the past eight quarters, ranging from 1.09 to 1.14. This indicates that the company has been maintaining a consistent level of debt relative to its equity during this period. A financial leverage ratio above 1 suggests that the company has more debt than equity in its capital structure.

The slight fluctuations in the ratio from quarter to quarter may be attributed to changes in the company's borrowing activities or variations in its asset and liability composition. Overall, a stable financial leverage ratio can reflect a prudent approach to managing debt levels and financial risk.

It is important to note that while a higher financial leverage ratio can amplify returns on equity when business is good, it also increases the financial risk and potential for financial distress during economic downturns. Therefore, monitoring this ratio over time is crucial for assessing the company's capital structure and financial health.