Allegro Microsystems Inc (ALGM)

Activity ratios

Short-term

Turnover ratios

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
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
Receivables turnover 8.57 9.22 11.04 13.97 8.38 9.12 8.68 8.33 7.70 7.25 7.35 7.17 7.07 6.39 6.37 6.92 7.28 6.44 6.23 6.65
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
Working capital turnover 1.96 1.96 2.13 2.44 2.31 2.51 1.85 1.91 2.01 2.01 1.95 2.06 1.95 1.91 1.89 2.02 2.02 1.99 1.88 2.04

Allegro Microsystems Inc's inventory turnover ratio has shown a generally increasing trend over the past few years, indicating an improvement in the company's efficiency in managing its inventory. The ratio increased from 3.38 in December 2020 to 2.19 in March 2025. This suggests that the company is selling its inventory more frequently, which is a positive sign.

The receivables turnover ratio has been fluctuating over the period, with a peak of 13.97 in June 2024. This could indicate some variability in the company's collection practices or the creditworthiness of its customers. However, overall, the ratio has been relatively strong, demonstrating the company's ability to collect receivables efficiently.

On the other hand, the payables turnover ratio has been relatively stable, with some fluctuations. The ratio decreased from 15.68 in December 2020 to 10.42 in March 2025. A lower payables turnover ratio may suggest that Allegro Microsystems Inc is taking longer to pay its suppliers, which could have implications for cash flow management.

The working capital turnover ratio has varied over the years, reaching a high of 2.51 in December 2023. This ratio reflects how efficiently the company is using its working capital to generate sales revenue. Generally, the ratio has shown some fluctuations but has maintained a relatively stable performance.

Overall, Allegro Microsystems Inc's activity ratios suggest some strengths in inventory management and working capital efficiency, but there may be room for improvement in managing receivables and payables effectively to optimize cash flow and overall operational efficiency.

Average number of days

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
Days of inventory on hand (DOH) days 166.37 172.85 149.13 143.76 124.77 127.52 137.67 136.29 122.24 94.95 96.38 84.91 89.86 88.54 87.87 82.10 80.00 89.31 106.00 108.03
Days of sales outstanding (DSO) days 42.59 39.58 33.06 26.13 43.54 40.02 42.03 43.81 47.41 50.38 49.68 50.90 51.62 57.14 57.33 52.74 50.16 56.65 58.56 54.91
Number of days of payables days 35.04 35.52 42.42 32.89 28.90 28.99 49.79 51.16 45.45 39.66 40.25 39.11 37.08 34.34 30.43 35.59 29.89 37.63 42.87 23.28

Allegro Microsystems Inc's activity ratios provide insights into how efficiently the company manages its inventory, collects its receivables, and pays its suppliers.

1. Days of Inventory on Hand (DOH): Allegro's DOH has shown some fluctuations over the years, with a general increasing trend from 2020 to 2025. A higher DOH indicates that Allegro is holding onto inventory for a longer period, which may tie up capital and increase storage costs. The peak DOH in December 2024 at 172.85 days may imply potential issues with inventory management and demand forecasting.

2. Days of Sales Outstanding (DSO): Allegro's DSO has fluctuated but generally trended downwards over the years. A lower DSO indicates that Allegro is collecting its receivables more quickly, which is a positive sign as it improves cash flow and working capital management. The significant drop in DSO from June 2024 to December 2024 may suggest improvements in the company's credit policies and collection processes.

3. Number of Days of Payables: Allegro's payables management has been relatively stable with some minor fluctuations. A higher number of days of payables suggests that Allegro is taking longer to pay its suppliers, which can help preserve cash flow. However, excessively delaying payments could strain supplier relationships. The decrease in days of payables from June 2023 to December 2023 may indicate a shift towards more timely payments to suppliers.

Overall, Allegro Microsystems Inc should focus on optimizing its inventory management to reduce excessive holding periods, continue improving its receivables collection efficiency, and strike a balance in its payables management to maintain good supplier relationships while managing cash flow effectively.

Long-term

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
Fixed asset turnover — — — — — — — 3.66 3.82 4.19 4.06 3.83 3.84 3.47 3.40 3.32 3.35 3.10 3.07 2.76
Total asset turnover 0.51 0.54 0.57 0.65 0.66 0.69 0.83 0.85 0.85 0.90 0.87 0.91 0.86 0.86 0.86 0.87 0.90 0.83 0.79 0.83

Allegro Microsystems Inc's fixed asset turnover ratio has shown a consistent upward trend over the years, increasing from 2.76 in December 2020 to 4.19 in December 2022, indicating that the company is generating more revenue relative to its investment in fixed assets. This suggests that Allegro is effectively utilizing its fixed assets to generate sales.

On the other hand, the total asset turnover ratio has been more volatile, fluctuating between 0.51 in March 2025 and 0.91 in September 2022. A decreasing trend in total asset turnover may indicate that Allegro is not efficiently utilizing its total assets to generate sales.

Overall, the increasing trend in fixed asset turnover suggests that Allegro is improving its efficiency in utilizing its fixed assets to generate revenue. However, the fluctuating total asset turnover indicates that the company may need to focus on optimizing the utilization of its total assets to improve overall efficiency and profitability.