POWI Current Ratio Analysis

The current ratio of 7.07x means POWI has $7.07 in short-term assets for every $1 of short-term liabilities, measuring its ability to cover debts due within a year.

This is far above the sector median of 1.25x, placing POWI in the 97th percentile among peers, which indicates unusually high liquidity. The trend shows a year-over-year change of N/A, but quarter-over-quarter the ratio rose by +2.8% from 6.88x to 7.07x. The combination of an already extreme liquidity level and a small quarterly increase implies limited additional financial risk from a solvency standpoint, though it also suggests capital may be sitting idle rather than being deployed for growth. For investment risk, this is a cushion against short-term shocks, but the high ratio can sometimes signal inefficiency in using assets. This metric supports the overall NEUTRAL verdict, as it confirms low short-term risk without providing a clear catalyst for upside, aligning with a balanced outlook.

Frequently Asked Questions