Allegro Microsystems Inc (ALGM)
Solvency ratios
| 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 23, 2022 | Sep 23, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.26 | 0.27 | 0.14 | 0.16 | 0.16 | 0.02 | 0.02 | 0.02 | 0.02 | 0.03 | 0.03 | 0.03 | 0.03 | 0.03 | 0.03 |
| Debt-to-capital ratio | 0.29 | 0.30 | 0.15 | 0.18 | 0.18 | 0.02 | 0.02 | 0.03 | 0.03 | 0.03 | 0.03 | 0.03 | 0.03 | 0.04 | 0.04 |
| Debt-to-equity ratio | 0.40 | 0.42 | 0.18 | 0.22 | 0.22 | 0.02 | 0.02 | 0.03 | 0.03 | 0.03 | 0.03 | 0.03 | 0.04 | 0.04 | 0.04 |
| Financial leverage ratio | 1.55 | 1.59 | 1.31 | 1.35 | 1.38 | 1.17 | 1.20 | 1.22 | 1.21 | 1.20 | 1.21 | 1.22 | 1.23 | 1.23 | 1.29 |
Based on the provided data, Allegro Microsystems Inc's solvency ratios indicate the following trends:
1. Debt-to-assets ratio:
- The company's debt-to-assets ratio remained relatively stable at around 0.03 from June 2021 to September 2023, indicating a low level of debt compared to its assets.
- However, there was a significant increase in the ratio from December 2023 to December 2024, reaching 0.26, which suggests a sudden increase in debt relative to the total assets of the company.
2. Debt-to-capital ratio:
- Similar to the debt-to-assets ratio, the debt-to-capital ratio was consistent at around 0.03 to 0.04 from June 2021 to September 2023.
- The ratio increased notably from December 2023 to December 2024, reaching 0.29, indicating a higher proportion of debt in the company's capital structure.
3. Debt-to-equity ratio:
- The debt-to-equity ratio followed a similar pattern to the debt-to-assets and debt-to-capital ratios, maintaining a low level of debt relative to equity until September 2024.
- However, there was a sharp increase from September 2024 to December 2024, with the ratio rising to 0.40, signaling a significant increase in debt compared to equity.
4. Financial leverage ratio:
- The financial leverage ratio decreased gradually from June 2021 to September 2023, indicating a decreasing reliance on debt to support the company's operations.
- There was a noticeable increase in the ratio from September 2023 to December 2024, peaking at 1.59, implying a higher level of financial risk and leverage in the company's capital structure.
In summary, Allegro Microsystems Inc experienced relatively stable solvency ratios in terms of debt-to-assets, debt-to-capital, and debt-to-equity ratios until a sudden increase in debt levels from late 2023 to 2024. The financial leverage ratio also showed a decreasing trend initially but rose significantly towards the end of the period, indicating increasing financial risk. These trends suggest a shift towards a more debt-heavy capital structure, which may pose risks to the company's financial stability in the long term.
Coverage ratios
| 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 23, 2022 | Sep 23, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | -0.74 | 0.75 | 8.15 | 19.08 | 40.97 | 98.07 | 101.10 | 98.02 | 95.26 | 86.01 | 51.56 | 67.20 | 24.59 | 8.86 | 6.06 |
The interest coverage ratio of Allegro Microsystems Inc has shown significant fluctuations over the periods provided in the data. It is a measure of the company's ability to meet its interest obligations with its operating income.
Initially, in June 2021, the interest coverage ratio was 6.06, indicating that the company's operating income was able to cover its interest expenses 6.06 times. This ratio improved steadily over the quarters, reaching a peak of 101.10 in June 2023, reflecting a strong ability to meet interest payments.
However, there was a notable decline in the interest coverage ratio in the following periods, dropping to 0.75 in September 2024 and even turning negative to -0.74 by December 2024. This suggests a concerning scenario where the operating income may not be sufficient to cover the interest expenses, potentially indicating financial distress.
Overall, the trend in Allegro Microsystems Inc's interest coverage ratio fluctuated significantly over the periods provided, showing periods of strength followed by a concerning decline. It is essential for the company to closely monitor its operating performance and manage its debt levels to ensure sustainable financial stability.