Allegro Microsystems Inc (ALGM)

Cash ratio

		Mar 31, 2025	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021
Cash and cash equivalents	US$ in thousands	121,334	212,143	351,576	282,383	197,214
Short-term investments	US$ in thousands	—	27,769	—	12,346	26,664
Total current liabilities	US$ in thousands	112,261	117,908	165,325	104,223	116,674
Cash ratio		1.08	2.03	2.13	2.83	1.92

March 31, 2025 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($121,334K + $—K) ÷ $112,261K
= 1.08

The cash ratio for Allegro Microsystems Inc has shown fluctuations over the past five years. Starting at 1.92 on March 31, 2021, it increased to 2.83 on March 31, 2022, indicating the company had a higher proportion of cash and cash equivalents relative to its current liabilities. However, in the subsequent years, the ratio decreased to 2.13 on March 31, 2023, and further to 2.03 on March 31, 2024. This downward trend suggests a decrease in the company's ability to cover its short-term liabilities solely with its cash holdings.

The most significant drop occurred on March 31, 2025, where the cash ratio plummeted to 1.08. This sharp decline could indicate potential liquidity challenges for Allegro Microsystems Inc in the most recent financial year, as the company may not have enough liquid assets to meet its immediate obligations. It would be advisable for the company to closely monitor its cash position and consider strategies to improve liquidity management in order to ensure financial stability and meet short-term obligations effectively.