Allegro Microsystems Inc (ALGM)

Inventory turnover

		Mar 31, 2025	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 31, 2022	Dec 23, 2022	Sep 30, 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
Cost of revenue (ttm)	US$ in thousands	403,479	407,842	432,341	446,618	474,813	473,861	458,900	466,463	451,764	459,681	452,865	423,092	399,806	366,611	357,899	350,586	356,080	336,585	301,291	317,654
Inventory	US$ in thousands	183,914	193,140	176,648	175,901	162,302	165,553	173,089	174,170	151,301	119,580	119,580	98,426	98,426	88,933	86,160	78,858	78,042	82,356	87,498	94,021
Inventory turnover		2.19	2.11	2.45	2.54	2.93	2.86	2.65	2.68	2.99	3.84	3.79	4.30	4.06	4.12	4.15	4.45	4.56	4.09	3.44	3.38

March 31, 2025 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $403,479K ÷ $183,914K
= 2.19

Allegro Microsystems Inc's inventory turnover has shown fluctuations over the period from December 31, 2020, to March 31, 2025. The inventory turnover ratio measures how efficiently the company manages its inventory by indicating how many times a company's inventory is sold and replaced over a specific period.

The inventory turnover ratio has ranged from a low of 2.11 times at December 31, 2024, to a high of 4.56 times at September 30, 2021. A higher inventory turnover ratio generally indicates that the company is managing its inventory efficiently and selling goods quickly, while a lower ratio may suggest excess inventory levels or slow-moving inventory.

Between December 31, 2020, and September 30, 2021, Allegro Microsystems Inc's inventory turnover gradually increased from 3.38 to 4.56 times, indicating improved efficiency in managing inventory. However, from September 30, 2021, to March 31, 2025, the inventory turnover ratio showed a declining trend, dropping to as low as 2.11 times, which could potentially signal challenges in inventory management or slower sales.

Overall, Allegro Microsystems Inc should closely monitor its inventory turnover ratio to ensure that inventory levels are optimized to meet customer demand and avoid excess inventory holding costs or stockouts. Periodic review and adjustment of inventory management practices may be necessary to maintain a healthy balance between inventory levels and sales performance.