Allegro Microsystems Inc (ALGM)

Payables 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
Payables	US$ in thousands	35,964	56,256	29,836	35,389
Payables turnover		18.74	9.75	17.31	13.46

March 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $674,137K ÷ $35,964K
= 18.74

Allegro Microsystems Inc's payables turnover has shown variability over the past four years. The payables turnover ratio indicates how efficiently the company is managing its outstanding payables by measuring how many times during a period the company pays off its average accounts payable balance.

In Mar 31, 2024, the payables turnover was 18.74, a significant increase from the previous year's 9.75. This surge suggests that Allegro Microsystems Inc improved its ability to settle its accounts payable obligations promptly, possibly indicating better liquidity management or enhanced supplier relationships.

Comparing Mar 31, 2024, with Mar 31, 2022, when the payables turnover was 17.31, the company has further accelerated its payments to suppliers. This may indicate a proactive approach to managing cash flow or negotiating favorable terms with suppliers.

However, in Mar 31, 2021, the payables turnover was 13.46, lower compared to both the recent year and two years prior. This could suggest that Allegro Microsystems Inc took longer to pay its outstanding payables in that period, potentially impacting relationships with suppliers or liquidity management.

Overall, the increasing trend in payables turnover reflects Allegro Microsystems Inc's improved efficiency in managing its payables, potentially signaling effective cash flow management and positive relationships with suppliers.