Allegro Microsystems Inc (ALGM)

Activity ratios

Short-term

Turnover ratios

	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	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	8.81	9.36	8.98	8.48	6.86	7.07	7.08	6.58	6.70	7.00	7.26	6.44
Payables turnover	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	2.30	2.49	1.84	1.88	1.94	1.88	1.95	1.92	1.88	2.01	1.99	1.96

Allegro Microsystems Inc's inventory turnover has shown a consistent trend over the past year, ranging from 3.24 to 4.66. This indicates that the company is efficiently managing its inventory by converting it into sales. The upward trend in inventory turnover suggests an improvement in inventory management efficiency.

Additionally, the receivables turnover ratio demonstrates consistency, ranging from 6.44 to 9.36. This shows that Allegro Microsystems Inc is effective in collecting its receivables and converting them into cash. The higher the turnover ratio, the better the company is at managing its accounts receivable.

The payables turnover ratio has been fluctuating over the past year, with a range between 8.63 and 18.77. This variability may indicate changes in the company's payment terms with suppliers. A higher turnover ratio suggests that the company is paying its suppliers more frequently, which could impact cash flow management.

Lastly, working capital turnover has also displayed some fluctuations, ranging from 1.84 to 2.49. This ratio reflects how efficiently the company is utilizing its working capital to generate sales revenue. A higher turnover ratio indicates that Allegro Microsystems Inc is effectively using its working capital to support its operations and generate revenue.

Overall, analyzing Allegro Microsystems Inc's activity ratios suggests that the company is managing its inventory, receivables, payables, and working capital efficiently to support its operations and generate revenue.

Average number of days

		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	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	41.45	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	19.44	21.00	38.16	42.29	36.11	32.74	26.58	22.49	21.09	24.52	19.60	25.94

Allegro Microsystems Inc's activity ratios provide insight into how efficiently the company manages its inventory, accounts receivable, and accounts payable.

1. Days of Inventory on Hand (DOH): The trend in DOH shows an increase in the number of days that inventory sits on the shelves before being sold. This indicates slower inventory turnover, which could tie up capital and increase carrying costs. In the first quarter of 2024, it took Allegro Microsystems Inc 87.74 days to sell its inventory, which is higher compared to the same period in previous years.

2. Days of Sales Outstanding (DSO): DSO reflects the average number of days it takes for the company to collect payment after making a sale. The decreasing trend in DSO is positive, showing that the company is collecting receivables more efficiently. In the first quarter of 2024, Allegro Microsystems Inc's DSO stood at 41.45 days, indicating an improvement in collecting payments compared to the same period in previous years.

3. Number of Days of Payables: This ratio represents the number of days it takes for the company to pay its suppliers. The fluctuating trend in the number of days of payables suggests variability in the company's payment terms with suppliers. In the first quarter of 2024, Allegro Microsystems Inc took 19.44 days to settle its payables, which is lower compared to the same period in some previous years.

Overall, Allegro Microsystems Inc's activity ratios indicate a need to focus on optimizing inventory management and maintaining efficient accounts receivable collection processes. The company should also ensure a balanced approach to managing payables to support healthy working capital management.

Long-term

	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	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	0.68	0.68	0.83	0.84	0.82	0.84	0.86	0.86	0.86	0.87	0.88	0.82

The fixed asset turnover ratio for Allegro Microsystems Inc has shown a slightly declining trend over the past year, fluctuating between 3.25 and 3.90. This indicates that the company generates revenue efficiently from its fixed assets, with a peak in the efficiency during the March 2023 quarter. On the other hand, the total asset turnover ratio has remained relatively stable, ranging from 0.68 to 0.88. This suggests that the company's overall asset utilization has been consistent, with revenue generated from its total assets showing some variability but overall maintaining a steady performance. The fixed asset turnover ratio is consistently higher than the total asset turnover ratio, indicating that Allegro Microsystems Inc relies more on its fixed assets to generate revenue efficiently. Further analysis may be needed to understand the factors contributing to these trends and their implications for the company's long-term operational efficiency.