Allegro Microsystems Inc (ALGM)

Inventory turnover

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021
Cost of revenue	US$ in thousands	674,137	548,321	516,370	476,232
Inventory	US$ in thousands	162,302	151,301	86,160	87,498
Inventory turnover		4.15	3.62	5.99	5.44

March 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $674,137K ÷ $162,302K
= 4.15

Allegro Microsystems Inc's inventory turnover has fluctuated over the past four fiscal years. In fiscal year ending March 31, 2024, the company's inventory turnover was 4.15, indicating that it generated sales 4.15 times over during the year. This shows a slight improvement from the previous year, where the inventory turnover was 3.62.

Comparing the most recent two years to the prior two years, there seems to be a downward trend in the inventory turnover ratio. The company had higher inventory turnover in fiscal year 2022 (5.99) and 2021 (5.44) as compared to the most recent years.

A lower inventory turnover ratio may suggest that Allegro Microsystems Inc is carrying higher levels of inventory compared to its sales volume. This could tie up more capital in inventory and potentially increase the risk of obsolescence or inventory write-downs. It may be worth investigating the reasons behind the fluctuating inventory turnover to optimize inventory management and enhance operational efficiency.