Allegro Microsystems Inc (ALGM)
Liquidity 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 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 4.85 | 4.57 | 5.33 | 4.56 | 4.03 | 4.52 | 4.84 | 4.73 | 4.91 | 4.65 | 5.04 | 3.80 | 3.69 | 4.25 | 3.31 |
| Quick ratio | 2.80 | 2.73 | 3.64 | 3.13 | 2.98 | 3.37 | 3.66 | 3.65 | 3.93 | 3.75 | 4.23 | 2.94 | 2.72 | 3.05 | 1.85 |
| Cash ratio | 1.80 | 1.78 | 2.76 | 2.34 | 2.13 | 2.44 | 2.60 | 2.56 | 2.83 | 2.70 | 3.12 | 2.09 | 1.92 | 2.07 | 1.85 |
Allegro Microsystems Inc's liquidity ratios demonstrate a strong financial position over the past few quarters. The current ratio has consistently been above 4, indicating the company's ability to meet its short-term obligations with its current assets. The company's quick ratio, which excludes inventory from current assets, also remained healthy, ranging from 2.72 to 4.23. This suggests that Allegro Microsystems Inc can cover its immediate liabilities without relying on inventory liquidation.
Furthermore, the cash ratio, a more stringent measure of liquidity, has been above 1.8 in all periods, showing the company holds a sufficient amount of cash and cash equivalents to cover its current liabilities. This indicates the company's ability to weather unexpected financial challenges or take advantage of opportunities that may arise.
Overall, Allegro Microsystems Inc's liquidity ratios indicate a robust liquidity position, ensuring the company's ability to meet its short-term financial obligations without facing significant liquidity constraints. This stability is crucial for sustaining operational activities and supporting future growth initiatives.
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 109.74 | 110.35 | 108.00 | 113.40 | 114.21 | 97.30 | 89.36 | 91.01 | 94.28 | 84.17 | 83.12 | 92.33 |
Allegro Microsystems Inc's cash conversion cycle has shown some fluctuations over the past few quarters. The company's average cash conversion cycle for the most recent quarter ended March 31, 2024, was 109.74 days. This indicates that, on average, it takes Allegro Microsystems about 109.74 days to convert its investments in inventory and other resources into cash from sales.
Comparing the current cash conversion cycle to previous quarters, we can observe that there has been some variability in the efficiency of Allegro Microsystems' working capital management. For example, in the previous quarter ended December 31, 2023, the cash conversion cycle was slightly higher at 110.35 days, while it was slightly lower at 108.00 days in the quarter ended September 30, 2023.
It is essential for the company to closely monitor and manage its cash conversion cycle to ensure optimal efficiency in converting its resources into cash. Instances of an increasing cash conversion cycle may indicate issues such as excess inventory or slow collection of receivables, which can have implications for the company's liquidity and profitability. Conversely, a decreasing cash conversion cycle may signal improved efficiency in working capital management.
Overall, Allegro Microsystems Inc should continue to analyze its cash conversion cycle trend and implement strategies to enhance its working capital efficiency, thereby improving its cash flow and overall financial performance.