Allegro Microsystems Inc (ALGM)

Quick ratio

		Mar 31, 2025	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021
Cash	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
Receivables	US$ in thousands	84,598	125,168	130,477	120,738	94,848
Total current liabilities	US$ in thousands	112,261	117,908	165,325	104,223	116,674
Quick ratio		1.83	3.10	2.92	3.99	2.73

March 31, 2025 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($121,334K + $—K + $84,598K) ÷ $112,261K
= 1.83

The quick ratio of Allegro Microsystems Inc has exhibited significant fluctuations over the past five years. As of March 31, 2021, the quick ratio stood at 2.73, indicating that the company had 2.73 times more liquid assets that could be quickly converted to cover its current liabilities. This ratio improved notably by March 31, 2022, reaching 3.99, signaling a strong liquidity position. However, in the following year, the quick ratio decreased to 2.92, although it remained above 2, suggesting that the company still had an adequate level of liquid assets to meet short-term obligations.

By March 31, 2024, the quick ratio slightly increased to 3.10, showing a further improvement in liquidity. Nonetheless, there was a notable decline in the quick ratio by March 31, 2025, dropping to 1.83. This decrease may indicate a potential liquidity challenge as the company had fewer liquid assets available relative to its current liabilities.

Overall, the quick ratio trend of Allegro Microsystems Inc displays some variability, with periods of strengthening and weakening liquidity positions. It is essential for the company to monitor and manage its liquidity effectively to ensure it can meet its short-term obligations in a sustainable manner.