Allegro Microsystems Inc (ALGM)

Fixed asset turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	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
Revenue (ttm)	US$ in thousands	737,693	810,951	933,063	1,043,668	1,070,478	1,067,931	1,030,581	972,710	905,391	843,434	799,845	768,055	741,851	710,474	653,311
Property, plant and equipment	US$ in thousands	320,975	325,051	319,763	321,175	325,822	312,047	285,200	263,099	232,076	219,240	214,808	210,028	207,705	198,069	196,993
Fixed asset turnover		2.30	2.49	2.92	3.25	3.29	3.42	3.61	3.70	3.90	3.85	3.72	3.66	3.57	3.59	3.32

December 31, 2024 calculation

Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $737,693K ÷ $320,975K
= 2.30

Allegro Microsystems Inc's fixed asset turnover has shown some fluctuations over the reporting period. The company's fixed asset turnover ratio ranged from a high of 3.90 on December 23, 2022, to a low of 2.30 on December 31, 2024. This ratio indicates how efficiently the company is utilizing its fixed assets to generate sales.

Overall, the trend in fixed asset turnover shows a general decline from the end of 2022 to the end of 2024. This may suggest that either the company has been increasing its investment in fixed assets at a faster rate than its sales growth or that there has been a decline in sales relative to fixed assets. A decreasing fixed asset turnover ratio can indicate inefficiencies in asset utilization or potential underperformance in generating sales from these assets.

It would be important for Allegro Microsystems Inc to investigate the reasons behind the declining trend in fixed asset turnover and take necessary actions to improve the efficiency of its fixed asset utilization in order to enhance overall operational performance and profitability.