Allegro Microsystems Inc (ALGM)

Allegro Microsystems Inc's solvency ratios indicate a very strong financial position with consistently low debt levels over the years.

The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio have all been at 0.00 from March 31, 2021, to March 31, 2025. This demonstrates that Allegro Microsystems Inc has no significant financial leverage, as its total debt is practically non-existent compared to its total assets, capital, and equity.

The Financial leverage ratio, which measures the company's financial risk, has shown a slight increase over the years but remains relatively low. The ratio increased from 1.28 in March 2021 to 1.53 in March 2025. This indicates that while Allegro Microsystems Inc has increased its financial leverage slightly, it is still maintaining a conservative level of debt relative to its equity.

Overall, the solvency ratios suggest that Allegro Microsystems Inc is in a strong financial position with low debt levels and a conservative approach to financial leverage, which bodes well for the company's long-term financial stability and ability to meet its financial obligations.

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Coverage ratios

Interest coverage ratio is a financial metric that determines a company's ability to meet its interest payments on outstanding debt. A higher interest coverage ratio indicates a better ability to cover interest expenses.

For Allegro Microsystems Inc, the interest coverage ratio has shown significant fluctuations over the past few years. In March 2021, the ratio was very low at 0.44, indicating that the company's earnings were only sufficient to cover 44% of its interest payments.

However, the situation significantly improved in the following years. By March 2022, Allegro Microsystems Inc's interest coverage increased significantly to 134.16, reflecting a strong capacity to cover its interest obligations. This suggests that the company had more than enough earnings to cover its interest expenses, indicating a lower risk of default.

In the subsequent years, Allegro Microsystems Inc maintained a relatively robust interest coverage ratio, with ratios of 91.47 in March 2023 and 19.10 in March 2024. These ratios, although lower than the peak in 2022, still indicate a healthy ability to meet interest expenses.

Interestingly, the interest coverage ratio dropped sharply to 0.00 in March 2025. A ratio of 0.00 signifies that the company's earnings were not sufficient to cover its interest payments at all. This significant decline raises concerns about Allegro Microsystems Inc's ability to service its debt obligations and may indicate financial distress.

Overall, Allegro Microsystems Inc's interest coverage ratio has shown fluctuations over the years, with both strengths and weaknesses in its ability to cover interest expenses. It is essential for stakeholders to closely monitor this ratio to assess the company's financial health and risk profile.