Allegro Microsystems Inc (ALGM)

Activity ratios

Short-term

Turnover ratios

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
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
Receivables turnover 8.80 10.53 14.73 8.81 9.36 8.98 8.48 6.86 7.07 7.08 6.58 6.70 7.00 7.26 6.44
Payables turnover 15.08 12.66 18.34 18.77 17.38 9.57 8.63 10.11 11.15 13.73 16.23 17.31 14.88 18.62 14.07
Working capital turnover 1.87 2.03 2.43 2.30 2.49 1.84 1.88 1.94 1.88 1.95 1.92 1.88 2.01 1.99 1.96

Activity ratios provide insight into how effectively Allegro Microsystems Inc is managing its assets and operations.

1. Inventory turnover ratio: This ratio has been fluctuating over the period, indicating changes in how quickly the company is selling its inventory. The ratio peaked in September 2021 and has since slightly decreased, which may suggest a slowdown in inventory movement or changes in sales strategy.

2. Receivables turnover ratio: This ratio measures how efficiently the company collects payments from its customers. The ratio shows an increasing trend until June 2024, indicating an improvement in the collection process. The substantial increase from June 2024 to September 2024 may be due to changes in the company's credit policies or customer base.

3. Payables turnover ratio: This ratio reflects how long the company takes to pay its suppliers. The ratio has displayed fluctuations, with a peak in September 2021 and then a downward trend until December 2022. The increase in the ratio from December 2023 onwards may suggest a more extended credit period taken by the company.

4. Working capital turnover ratio: This ratio demonstrates how efficiently the company utilizes its working capital to generate sales. The ratio remained relatively stable until December 2023, after which it showed a significant increase, indicating improved efficiency in utilizing working capital to drive sales.

Overall, analyzing these activity ratios provides valuable insights into Allegro Microsystems Inc's operational efficiency and effectiveness in managing its assets and resources to drive revenue growth.

Average number of days

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
Days of inventory on hand (DOH) days 117.84 101.39 99.06 87.74 92.37 105.51 112.65 97.12 78.39 64.41 58.00 60.90 56.56 52.46 61.56
Days of sales outstanding (DSO) days 41.47 34.65 24.78 41.45 38.98 40.65 43.03 53.20 51.65 51.53 55.51 54.47 52.13 50.26 56.71
Number of days of payables days 24.21 28.84 19.91 19.44 21.00 38.16 42.29 36.11 32.74 26.58 22.49 21.09 24.52 19.60 25.94

Based on the provided data, we can analyze the activity ratios of Allegro Microsystems Inc as follows:

1. Days of Inventory on Hand (DOH):
- The trend in the Days of Inventory on Hand shows an increase from 61.56 days on June 30, 2021, to 117.84 days on December 31, 2024. This indicates that the company is holding onto inventory for a longer period before it is sold.
- The highest value of DOH was observed on June 30, 2023 (112.65 days), and the lowest value was on September 30, 2021 (52.46 days).

2. Days of Sales Outstanding (DSO):
- The Days of Sales Outstanding decreased from 56.71 days on June 30, 2021, to 41.47 days on December 31, 2024. This implies that the company is collecting receivables more efficiently over time.
- The highest value of DSO was noted on June 30, 2021 (56.71 days), and the lowest value was observed on June 30, 2024 (24.78 days).

3. Number of Days of Payables:
- The Number of Days of Payables fluctuated during the period, with the lowest value of 19.44 days recorded on March 31, 2024, and the highest value of 42.29 days on June 30, 2023.
- The trend of days of payables shows a relatively stable pattern, with some fluctuations but no clear increasing or decreasing trend observed.

In conclusion, Allegro Microsystems Inc's activity ratios indicate that the company has been improving its inventory and receivables management efficiency over the years, although there have been fluctuations in the number of days of payables. However, further analysis and comparison with industry benchmarks would be necessary to assess the company's performance more comprehensively.

Long-term

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
Fixed asset turnover 2.30 2.49 2.92 3.25 3.29 3.42 3.61 3.70 3.90 3.85 3.72 3.66 3.57 3.59 3.32
Total asset turnover 0.51 0.54 0.64 0.68 0.68 0.83 0.84 0.82 0.84 0.86 0.86 0.86 0.87 0.88 0.82

Allegro Microsystems Inc's Fixed Asset Turnover ratio has shown fluctuations over the analyzed period, starting at 3.32 on June 30, 2021, and peaking at 3.90 on December 23, 2022. However, the ratio has been on a declining trend since then, dropping to 2.30 on December 31, 2024. This indicates a decrease in the efficiency of utilizing fixed assets to generate sales revenue.

On the other hand, the Total Asset Turnover ratio has been relatively stable but declining gradually, from 0.82 on June 30, 2021, to 0.51 on December 31, 2024. This suggests that the company's overall efficiency in generating sales revenue from its total assets has been decreasing over the analyzed period.

Overall, the declining trend in both Fixed Asset Turnover and Total Asset Turnover ratios may indicate potential inefficiencies in asset utilization and potential operational challenges that may need closer attention and management intervention.