Stock Analysis on Net

Monolithic Power Systems Inc. (NASDAQ:MPWR)

This company has been moved to the archive! The financial data has not been updated since May 5, 2023.

Economic Value Added (EVA)

Microsoft Excel

Economic Profit

Monolithic Power Systems Inc., economic profit calculation

US$ in thousands

Microsoft Excel
12 months ended: Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Net operating profit after taxes (NOPAT)1 416,610 248,394 160,282 99,197 101,670
Cost of capital2 14.93% 14.93% 14.93% 14.93% 14.93%
Invested capital3 1,231,421 683,433 635,280 460,591 428,429
 
Economic profit4 232,710 146,340 65,409 30,421 37,710

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2022 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 416,61014.93% × 1,231,421 = 232,710

Item Description The company
Economic profit Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital. Monolithic Power Systems Inc. economic profit increased from 2020 to 2021 and from 2021 to 2022.

Net Operating Profit after Taxes (NOPAT)

Monolithic Power Systems Inc., NOPAT calculation

US$ in thousands

Microsoft Excel
12 months ended: Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Net income 437,672 242,023 164,375 108,839 105,268
Deferred income tax expense (benefit)1 (12,942) 1,405 (1,688) (514) (805)
Increase (decrease) in warranty reserves2 3,093 14,094 5,756 (3,425) 2,148
Increase (decrease) in equity equivalents3 (9,849) 15,499 4,068 (3,939) 1,343
Interest expense
Interest expense, operating lease liability4 80 116 84 87
Adjusted interest expense 80 116 84 87
Tax benefit of interest expense5 (17) (24) (18) (18)
Adjusted interest expense, after taxes6 63 92 66 69
(Gain) loss on marketable securities 96 (33) (1,087) (1) 66
Interest income (14,369) (11,637) (9,327) (7,305) (6,321)
Investment income, before taxes (14,273) (11,670) (10,414) (7,306) (6,255)
Tax expense (benefit) of investment income7 2,997 2,451 2,187 1,534 1,314
Investment income, after taxes8 (11,276) (9,219) (8,227) (5,772) (4,941)
Net operating profit after taxes (NOPAT) 416,610 248,394 160,282 99,197 101,670

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

1 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in warranty reserves.

3 Addition of increase (decrease) in equity equivalents to net income.

4 2022 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 3,797 × 2.10% = 80

5 2022 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 80 × 21.00% = 17

6 Addition of after taxes interest expense to net income.

7 2022 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 14,273 × 21.00% = 2,997

8 Elimination of after taxes investment income.

Item Description The company
NOPAT Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income. Monolithic Power Systems Inc. NOPAT increased from 2020 to 2021 and from 2021 to 2022.

Cash Operating Taxes

Monolithic Power Systems Inc., cash operating taxes calculation

US$ in thousands

Microsoft Excel
12 months ended: Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Income tax expense 87,265 30,196 4,967 4,281 13,214
Less: Deferred income tax expense (benefit) (12,942) 1,405 (1,688) (514) (805)
Add: Tax savings from interest expense 17 24 18 18
Less: Tax imposed on investment income 2,997 2,451 2,187 1,534 1,314
Cash operating taxes 97,226 26,365 4,486 3,279 12,705

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Item Description The company
Cash operating taxes Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction. Monolithic Power Systems Inc. cash operating taxes increased from 2020 to 2021 and from 2021 to 2022.

Invested Capital

Monolithic Power Systems Inc., invested capital calculation (financing approach)

US$ in thousands

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Operating lease liability1 3,797 5,807 3,099 2,357 2,877
Total reported debt & leases 3,797 5,807 3,099 2,357 2,877
Stockholders’ equity 1,668,602 1,243,985 966,587 773,491 640,093
Net deferred tax (assets) liabilities2 (35,252) (21,917) (18,556) (17,193) (16,830)
Warranty reserves3 24,082 20,989 6,895 1,139 4,564
Equity equivalents4 (11,170) (928) (11,661) (16,054) (12,266)
Accumulated other comprehensive (income) loss, net of tax5 23,077 (15,880) (10,140) 5,476 5,543
Adjusted stockholders’ equity 1,680,509 1,227,177 944,786 762,913 633,370
Construction in progress6 (1,908) (11,333) (49,575) (19,104)
Debt investments7 (450,977) (538,218) (263,030) (285,575) (207,818)
Invested capital 1,231,421 683,433 635,280 460,591 428,429

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

1 Addition of capitalized operating leases.

2 Elimination of deferred taxes from assets and liabilities. See details »

3 Addition of warranty reserves.

4 Addition of equity equivalents to stockholders’ equity.

5 Removal of accumulated other comprehensive income.

6 Subtraction of construction in progress.

7 Subtraction of debt investments.

Item Description The company
Invested capital Capital is an approximation of the economic book value of all cash invested in going-concern business activities. Monolithic Power Systems Inc. invested capital increased from 2020 to 2021 and from 2021 to 2022.

Cost of Capital

Monolithic Power Systems Inc., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 22,851,153 22,851,153 ÷ 22,854,950 = 1.00 1.00 × 14.94% = 14.93%
Operating lease liability3 3,797 3,797 ÷ 22,854,950 = 0.00 0.00 × 2.10% × (1 – 21.00%) = 0.00%
Total: 22,854,950 1.00 14.93%

Based on: 10-K (reporting date: 2022-12-31).

1 US$ in thousands

2 Equity. See details »

3 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 21,461,113 21,461,113 ÷ 21,466,920 = 1.00 1.00 × 14.94% = 14.93%
Operating lease liability3 5,807 5,807 ÷ 21,466,920 = 0.00 0.00 × 2.00% × (1 – 21.00%) = 0.00%
Total: 21,466,920 1.00 14.93%

Based on: 10-K (reporting date: 2021-12-31).

1 US$ in thousands

2 Equity. See details »

3 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 17,748,850 17,748,850 ÷ 17,751,949 = 1.00 1.00 × 14.94% = 14.93%
Operating lease liability3 3,099 3,099 ÷ 17,751,949 = 0.00 0.00 × 2.70% × (1 – 21.00%) = 0.00%
Total: 17,751,949 1.00 14.93%

Based on: 10-K (reporting date: 2020-12-31).

1 US$ in thousands

2 Equity. See details »

3 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 7,075,661 7,075,661 ÷ 7,078,018 = 1.00 1.00 × 14.94% = 14.93%
Operating lease liability3 2,357 2,357 ÷ 7,078,018 = 0.00 0.00 × 3.70% × (1 – 21.00%) = 0.00%
Total: 7,078,018 1.00 14.93%

Based on: 10-K (reporting date: 2019-12-31).

1 US$ in thousands

2 Equity. See details »

3 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 5,844,301 5,844,301 ÷ 5,847,178 = 1.00 1.00 × 14.94% = 14.93%
Operating lease liability3 2,877 2,877 ÷ 5,847,178 = 0.00 0.00 × 0.00% × (1 – 21.00%) = 0.00%
Total: 5,847,178 1.00 14.93%

Based on: 10-K (reporting date: 2018-12-31).

1 US$ in thousands

2 Equity. See details »

3 Operating lease liability. See details »


Economic Spread Ratio

Monolithic Power Systems Inc., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Selected Financial Data (US$ in thousands)
Economic profit1 232,710 146,340 65,409 30,421 37,710
Invested capital2 1,231,421 683,433 635,280 460,591 428,429
Performance Ratio
Economic spread ratio3 18.90% 21.41% 10.30% 6.60% 8.80%
Benchmarks
Economic Spread Ratio, Competitors4
Advanced Micro Devices Inc. -19.46% 37.26% 11.01% -7.11%
Analog Devices Inc. -8.52% -11.79% -6.84% -5.30% -8.07%
Applied Materials Inc. 28.45% 23.97% 12.15% 11.79% 19.88%
Broadcom Inc. 7.79% -1.58% -7.12% -6.81% -2.63%
First Solar Inc. -1.27% -7.07% -12.74% -18.20%
Intel Corp. -7.05% 10.13% 15.79% 13.87%
KLA Corp. 26.83% 15.47% 4.35% 5.86%
Lam Research Corp. 24.01% 19.38% 3.44% 0.08%
Micron Technology Inc. 1.37% -3.18% -8.75% 1.43%
NVIDIA Corp. 32.73% 13.16% -0.84% 59.76%
Qualcomm Inc. 30.19% 27.60% 12.64% 14.02%
Texas Instruments Inc. 36.13% 34.75% 29.90% 29.58%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

1 Economic profit. See details »

2 Invested capital. See details »

3 2022 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 232,710 ÷ 1,231,421 = 18.90%

4 Click competitor name to see calculations.

Performance ratio Description The company
Economic spread ratio The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital. Monolithic Power Systems Inc. economic spread ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.

Economic Profit Margin

Monolithic Power Systems Inc., economic profit margin calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Selected Financial Data (US$ in thousands)
Economic profit1 232,710 146,340 65,409 30,421 37,710
Revenue 1,794,148 1,207,798 844,452 627,921 582,382
Performance Ratio
Economic profit margin2 12.97% 12.12% 7.75% 4.84% 6.48%
Benchmarks
Economic Profit Margin, Competitors3
Advanced Micro Devices Inc. -48.26% 14.05% 4.92% -3.60%
Analog Devices Inc. -31.94% -75.76% -22.22% -16.22% -24.24%
Applied Materials Inc. 16.43% 15.29% 9.25% 8.17% 11.74%
Broadcom Inc. 14.57% -3.73% -19.65% -18.10% -5.62%
First Solar Inc. -1.81% -13.46% -25.53% -27.16%
Intel Corp. -9.91% 11.34% 16.63% 15.53%
KLA Corp. 22.69% 15.25% 4.87% 8.18%
Lam Research Corp. 17.72% 15.63% 4.00% 0.09%
Micron Technology Inc. 2.35% -5.31% -17.25% 2.38%
NVIDIA Corp. 21.94% 10.29% -1.09% 24.40%
Qualcomm Inc. 20.11% 16.62% 9.54% 12.39%
Texas Instruments Inc. 31.69% 31.08% 26.80% 24.79%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

1 Economic profit. See details »

2 2022 Calculation
Economic profit margin = 100 × Economic profit ÷ Revenue
= 100 × 232,710 ÷ 1,794,148 = 12.97%

3 Click competitor name to see calculations.

Performance ratio Description The company
Economic profit margin The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin. Monolithic Power Systems Inc. economic profit margin improved from 2020 to 2021 and from 2021 to 2022.