Allegro Microsystems Inc (ALGM)

Working capital turnover

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
Revenue (ttm) US$ in thousands 737,693 810,951 933,063 1,043,668 1,070,478 1,067,931 1,030,581 972,710 905,391 843,434 799,845 768,055 741,851 710,474 653,311
Total current assets US$ in thousands 495,627 523,560 490,283 572,213 549,496 714,896 700,304 665,829 619,952 545,485 529,034 511,692 469,192 445,914 452,527
Total current liabilities US$ in thousands 100,912 124,008 105,537 117,908 120,187 134,241 153,545 165,325 137,228 112,754 111,804 104,223 100,841 88,416 119,033
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

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $737,693K ÷ ($495,627K – $100,912K)
= 1.87

Working capital turnover measures how efficiently a company utilizes its working capital to generate sales revenue. A higher working capital turnover ratio indicates better efficiency in managing working capital.

Based on the provided data for Allegro Microsystems Inc, we observe fluctuations in the working capital turnover ratio over the period. The ratio ranged from a low of 1.84 on September 30, 2023, to a high of 2.49 on December 31, 2023. This increase from 1.84 to 2.49 may indicate an improvement in the company's ability to generate sales revenue using its working capital more effectively.

However, the ratio decreased thereafter, reaching 1.87 by December 31, 2024. Despite this decline, the ratio remained above 2 for several quarters, indicating relatively efficient utilization of working capital during that period.

It is essential for Allegro Microsystems Inc to closely monitor its working capital turnover ratio over time to ensure optimal efficiency in managing its working capital and supporting sustained revenue generation. fluctuations in the ratio may signal changes in the company's operational efficiency and financial health.