Allegro Microsystems Inc (ALGM)

Payables 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
Payables	US$ in thousands	38,733	39,685	50,245	40,241	37,590	37,633	62,603	65,382	56,256	49,945	49,945	45,329	40,620	34,492	29,836	34,189	29,158	34,704	35,389	20,262
Payables turnover		10.42	10.28	8.60	11.10	12.63	12.59	7.33	7.13	8.03	9.20	9.07	9.33	9.84	10.63	12.00	10.25	12.21	9.70	8.51	15.68

March 31, 2025 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $403,479K ÷ $38,733K
= 10.42

The payables turnover ratio for Allegro Microsystems Inc has shown some fluctuations over the past few years, ranging from a high of 15.68 in December 2020 to a low of 7.13 in June 2023. The payables turnover ratio measures how efficiently a company is managing its accounts payable by indicating how many times a company pays its average accounts payable balance during a period.

A higher payables turnover ratio generally indicates that the company is paying its suppliers more frequently, which could imply good relationships with suppliers or efficient cash management. Conversely, a lower payables turnover ratio may suggest that the company is taking longer to pay its suppliers, which could signal liquidity issues or strained relationships with suppliers.

In analyzing Allegro Microsystems Inc's payables turnover ratio trends, we can see that there have been periods of fluctuation, with some improvement in the ratio in the more recent quarters compared to the mid-2020s. This could indicate changes in the company's payment policies, cash flow management strategies, or relationships with suppliers during this time frame. It would be important to further investigate the reasons behind these fluctuations to gain a better understanding of the company's financial management practices.