Allegro Microsystems Inc (ALGM)

Days of sales outstanding (DSO)

		Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 23, 2022	Sep 23, 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
Receivables turnover		8.81	9.36	8.98	8.48	6.86	7.07	7.08	6.58	6.70	7.00	7.26	6.44
DSO	days	41.45	38.98	40.65	43.03	53.20	51.65	51.53	55.51	54.47	52.13	50.26	56.71

March 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 8.81
= 41.45

The Days of Sales Outstanding (DSO) ratio for Allegro Microsystems Inc has been varying over the past few quarters. DSO measures the average number of days it takes for a company to collect payment after making a sale.

Looking at the trend, we can see that the DSO has fluctuated between 38.98 days and 56.71 days over the last few quarters. A lower DSO indicates that the company is collecting payments more quickly, which is generally seen as a positive sign as it improves cash flow and liquidity.

On the other hand, a higher DSO may suggest that the company is facing difficulties in collecting payments from its customers promptly, potentially indicating issues with credit policies, customer payment behavior, or collection processes.

It would be important for Allegro Microsystems Inc to closely monitor its DSO and investigate the reasons behind any significant fluctuations to ensure efficient cash management and maintain a healthy working capital position.