Allegro Microsystems Inc (ALGM)

Liquidity 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
Current ratio 4.30 4.91 4.22 4.65 4.85 4.57 5.33 4.56 4.03 4.52 4.52 4.84 4.84 4.73 4.91 4.65 5.04 3.80 3.69 4.25
Quick ratio 1.83 2.20 2.14 2.28 2.95 2.77 3.68 3.15 2.92 3.41 3.37 3.79 3.66 3.68 3.99 3.77 4.24 2.96 2.73 3.07
Cash ratio 1.08 1.37 1.52 1.64 1.88 1.78 2.76 2.34 2.13 2.44 2.44 2.69 2.60 2.56 2.83 2.70 3.12 2.09 1.92 2.07

Allegro Microsystems Inc's liquidity ratios have shown consistent levels over the past few years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has generally been above 4. This indicates that Allegro Microsystems Inc has a strong ability to meet its short-term liabilities.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also been above 2 in most periods, although it slightly declined towards the end of the period to around 1.8. This suggests that Allegro Microsystems Inc may have some dependency on inventory to meet its short-term obligations but overall, it still demonstrates a reasonable level of liquidity.

The cash ratio, which indicates the company's ability to pay off its current liabilities using only its most liquid assets (cash and cash equivalents), has generally been above 1.5, indicating that Allegro Microsystems Inc maintains a strong cash position relative to its current liabilities.

Overall, based on these liquidity ratios, Allegro Microsystems Inc appears to have a solid liquidity position, with ample current assets to cover its short-term obligations. However, monitoring the declining trend in quick ratio and cash ratio towards the end of the period may be warranted to ensure sustained liquidity strength.


Additional liquidity measure

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
Cash conversion cycle days 173.93 176.92 139.78 137.00 139.41 138.55 129.91 128.93 124.20 105.67 105.80 96.71 104.39 111.34 114.77 99.25 100.27 108.33 121.68 139.66

Allegro Microsystems Inc.'s cash conversion cycle has shown some fluctuations over the analyzed period. The cash conversion cycle measures the length of time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Starting at 139.66 days on December 31, 2020, the cash conversion cycle decreased steadily to 96.71 days on September 30, 2022, indicating an improvement in the efficiency of the company's operations. However, the cycle increased slightly to 138.55 days by December 31, 2023, and further to 176.92 days by December 31, 2024. These increases suggest a potential challenge in managing working capital effectively during those periods.

Overall, it is important for Allegro Microsystems Inc. to closely monitor and manage its cash conversion cycle to ensure optimal levels of inventory, accounts receivables, and accounts payables, all of which directly impact the company's liquidity and working capital management.