NetScout Systems Inc (NTCT)

Cash conversion cycle

		Mar 31, 2025	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 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
Days of inventory on hand (DOH)	days	22.69	28.69	33.16	30.17	27.45	29.78	28.86	31.21	29.38	30.92	39.30	37.65	48.09	35.43	34.31	34.03	37.49	41.34	39.85	41.44
Days of sales outstanding (DSO)	days	72.61	95.38	55.01	59.51	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
Number of days of payables	days	37.18	27.25	28.15	32.07	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
Cash conversion cycle	days	58.11	96.82	60.02	57.61	83.73	97.37	63.51	49.96	59.84	93.03	61.27	51.48	73.91	102.29	74.95	70.03	94.78	100.45	82.87	72.15

March 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 22.69 + 72.61 – 37.18
= 58.11

The cash conversion cycle (CCC) for NetScout Systems Inc has shown fluctuations over the periods analyzed. From June 30, 2020, to March 31, 2025, the CCC ranged from a low of 49.96 days (June 30, 2023) to a high of 102.29 days (December 31, 2021).

A shorter CCC indicates that the company is able to convert its inventory and receivables into cash more quickly, which is generally favorable as it implies efficient working capital management. Conversely, a longer CCC may suggest inefficiencies in inventory management, collections, or payment processes.

NetScout Systems Inc's CCC decreased significantly from December 31, 2021, to June 30, 2022, indicating improved efficiency in managing its working capital during that period. However, there were fluctuations in CCC after June 30, 2022, with some periods showing improvements and others showing a slight increase.

Overall, NetScout Systems Inc should strive to maintain a reasonable CCC to ensure optimal cash flow management and operational efficiency. Monitoring and managing the components of the cash conversion cycle, including inventory turnover, accounts receivable days, and accounts payable days, will be crucial for the company to sustain healthy working capital levels.