NetScout Systems Inc (NTCT)

Cash conversion cycle

		Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019
Days of inventory on hand (DOH)	days	27.45	29.78	28.86	31.21	29.38	30.92	39.30	38.33	48.09	35.43	43.42	34.03	37.49	41.34	39.85	41.44	33.50	38.31	39.51	39.15
Days of sales outstanding (DSO)	days	84.53	96.96	62.90	43.11	57.41	87.77	57.04	47.14	63.24	97.24	70.42	63.70	86.81	89.62	70.50	56.95	87.39	99.59	83.58	65.57
Number of days of payables	days	28.25	29.38	28.25	24.36	26.95	25.66	35.07	33.31	37.42	30.38	29.78	27.70	29.52	30.51	27.48	26.25	30.15	30.30	52.57	37.82
Cash conversion cycle	days	83.73	97.37	63.51	49.96	59.84	93.03	61.27	52.16	73.91	102.29	84.06	70.03	94.78	100.45	82.87	72.15	90.74	107.60	70.51	66.91

March 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 27.45 + 84.53 – 28.25
= 83.73

The cash conversion cycle of NetScout Systems Inc has exhibited fluctuations over the past several quarters, indicating variability in the company's efficiency in converting its resources into cash.

The trend shows that the cash conversion cycle has ranged from a low of 49.96 days in June 2023 to a high of 102.29 days in December 2021, with fluctuations in between. This suggests that the company has experienced periods of improved operational efficiency in managing its cash flows, as well as times when it faced challenges in converting its investments into cash.

On average, the company takes around 80 days to convert its investments in inventory and accounts receivable into cash. A lower cash conversion cycle is generally considered favorable as it indicates that the company is able to efficiently manage its working capital and generate cash quickly from its operations.

It is important for the company to closely monitor and manage its cash conversion cycle to ensure optimal liquidity and operating efficiency. By analyzing the factors influencing the cycle, such as inventory turnover, accounts receivable collection period, and accounts payable payment period, NetScout Systems Inc can identify areas for improvement and implement strategies to shorten the cycle and enhance its overall financial performance.