Allegro Microsystems Inc (ALGM)

Working capital turnover

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021
Revenue	US$ in thousands	1,043,670	972,297	768,005	579,037
Total current assets	US$ in thousands	572,213	665,829	511,692	430,564
Total current liabilities	US$ in thousands	117,908	165,325	104,223	116,674
Working capital turnover		2.30	1.94	1.88	1.84

March 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,043,670K ÷ ($572,213K – $117,908K)
= 2.30

Allegro Microsystems Inc's working capital turnover has shown a consistent increase over the past four years, reaching 2.30 in March 31, 2024, compared to 1.94 in March 31, 2023, 1.88 in March 31, 2022, and 1.84 in March 31, 2021. This indicates that the company has been more efficient in utilizing its working capital to generate sales revenue.

A higher working capital turnover ratio implies that the company is efficiently managing its current assets and liabilities to support its operations and generate more sales for each unit of working capital invested. This improvement over the years suggests that Allegro Microsystems Inc has been able to optimize its working capital management, potentially leading to increased profitability and liquidity.

It is essential for the company to maintain this positive trend in working capital turnover, as it signifies effective management of resources and a healthy financial position. Further analysis of the components of working capital and related financial ratios can provide a more in-depth understanding of Allegro Microsystems Inc's overall financial performance and liquidity management.