Allegro Microsystems Inc (ALGM)

Inventory 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
Cost of revenue (ttm) US$ in thousands 598,255 635,918 648,109 675,181 654,212 598,808 564,316 568,633 556,778 557,723 559,700 516,370 508,871 542,957 488,290
Inventory US$ in thousands 193,140 176,648 175,901 162,302 165,553 173,089 174,170 151,301 119,580 98,426 88,933 86,160 78,858 78,042 82,356
Inventory turnover 3.10 3.60 3.68 4.16 3.95 3.46 3.24 3.76 4.66 5.67 6.29 5.99 6.45 6.96 5.93

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $598,255K ÷ $193,140K
= 3.10

Allegro Microsystems Inc's inventory turnover has shown fluctuations over the analyzed period. The inventory turnover ratio measures how efficiently the company manages its inventory by comparing the cost of goods sold to the average inventory levels. A higher inventory turnover ratio indicates that the company is selling goods quickly and efficiently.

Based on the provided data, we observe that Allegro Microsystems Inc's inventory turnover has varied between 3.10 and 6.96 over the analyzed period. The highest inventory turnover was seen in September 30, 2021, at 6.96, indicating that the company efficiently sold and replenished its inventory during that quarter.

However, towards the end of the period, the inventory turnover ratio has decreased, reaching its lowest point of 3.10 on December 31, 2024. A declining inventory turnover ratio may suggest inefficiencies in managing inventory levels or challenges in selling products effectively.

It is essential for Allegro Microsystems Inc to closely monitor its inventory turnover ratio to ensure optimal inventory management. Strategies such as improving demand forecasting, streamlining supply chain operations, and optimizing production processes can help enhance inventory turnover and overall operational efficiency.