NetScout Systems Inc (NTCT)

Cash conversion cycle

Mar 31, 2025 Mar 31, 2024 Mar 31, 2023 Mar 31, 2022 Mar 31, 2021
Days of inventory on hand (DOH) days 26.33 27.45 29.38 48.09 37.49
Days of sales outstanding (DSO) days 72.61 84.53 57.41 63.24 86.81
Number of days of payables days 37.18 28.25 26.95 37.42 29.52
Cash conversion cycle days 61.75 83.73 59.84 73.91 94.78

March 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 26.33 + 72.61 – 37.18
= 61.75

The cash conversion cycle for NetScout Systems Inc has shown some volatility in recent years. In March 2021, the cash conversion cycle was 94.78 days, indicating that it took the company almost three months to convert its investments in inventory and accounts receivable into cash.

Over the following years, there was a notable improvement in the cash conversion cycle, with the cycle decreasing to 73.91 days in March 2022, 59.84 days in March 2023, and further to 61.75 days in March 2025. These decreasing values suggest that NetScout Systems Inc has been able to manage its working capital more efficiently, leading to a quicker conversion of investments into cash.

However, there was a slight increase in the cash conversion cycle in March 2024 to 83.73 days, indicating a less efficient management of working capital compared to the previous year.

Overall, the trend in the cash conversion cycle for NetScout Systems Inc has shown improvement over the years, with fluctuations in certain periods. Monitoring this metric can provide insights into the company's ability to manage its working capital effectively and generate cash flows from its operations.