Allegro Microsystems Inc (ALGM)

Inventory turnover

		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
Cost of revenue (ttm)	US$ in thousands	675,181	654,212	598,808	564,316	568,633	556,778	557,723	559,700	516,370	508,871	542,957	488,290
Inventory	US$ in thousands	162,302	165,553	173,089	174,170	151,301	119,580	98,426	88,933	86,160	78,858	78,042	82,356	87,498	94,021	104,796
Inventory turnover		4.16	3.95	3.46	3.24	3.76	4.66	5.67	6.29	5.99	6.45	6.96	5.93

March 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $675,181K ÷ $162,302K
= 4.16

Allegro Microsystems Inc's inventory turnover ratio has shown some fluctuations over the past 15 quarters. The inventory turnover ratio measures how efficiently a company manages its inventory by indicating the number of times the company's inventory is sold and replaced over a specific period.

The trend in Allegro Microsystems Inc's inventory turnover ratio indicates that the company has generally been able to sell and replace its inventory effectively. The inventory turnover ratio has ranged from a low of 3.24 to a high of 6.96 over the period analyzed.

A higher inventory turnover ratio suggests that Allegro Microsystems Inc is efficiently managing its inventory, as it indicates that the company is selling its inventory quickly. A lower ratio may indicate that inventory is not being sold as quickly, potentially leading to higher carrying costs and obsolescence risks.

It is important for the company to monitor its inventory turnover ratio over time to ensure optimal inventory management and operational efficiency. Rising or falling ratios can provide insights into changing demand patterns, production efficiencies, or supply chain challenges that may impact the company's overall financial performance.