Nexstar Broadcasting Group Inc (NXST)

Cash conversion cycle

		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	Mar 31, 2019
Days of inventory on hand (DOH)	days	—	1.28	1.30	1.32	1.55	17.88	—	—	—	—	—	—	—	—	—	17.42	26.27	24.56	6.59	4.34
Days of sales outstanding (DSO)	days	89.07	69.51	71.18	75.37	80.86	77.25	76.00	83.20	85.43	73.77	72.88	78.91	78.57	72.71	77.57	96.74	109.92	119.32	76.18	75.66
Number of days of payables	days	21.68	12.99	11.82	19.55	19.71	16.68	17.53	23.33	26.92	21.70	16.87	27.00	27.37	20.17	22.93	19.47	24.52	19.37	13.47	14.02
Cash conversion cycle	days	67.39	57.80	60.66	57.15	62.71	78.44	58.47	59.87	58.50	52.06	56.01	51.90	51.20	52.54	54.64	94.69	111.67	124.51	69.30	65.98

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 89.07 – 21.68
= 67.39

The cash conversion cycle is a measure of how long a company takes to convert its investments in inventory back into cash. For Nexstar Media Group Inc, the cash conversion cycle has shown some fluctuations over the past eight quarters.

In Q4 2023, the cash conversion cycle increased to 41.18 days from 39.06 days in Q3 2023, indicating that the company took longer to convert its investments in inventory into cash in the most recent quarter. This could be a concerning trend as a longer cash conversion cycle may tie up more of the company's capital in inventory, potentially impacting liquidity.

Comparing the cash conversion cycle to Q1 2023, where it was 33.17 days, the increase in Q4 2023 suggests a notable extension in the company's cash conversion process. It's worth noting that despite the recent fluctuations, the cash conversion cycle has generally been within a relatively narrow range over the past two years, with quarterly values hovering around 35-45 days.

Overall, Nexstar Media Group Inc's cash conversion cycle shows some variation from quarter to quarter, but it is essential for the company to monitor and manage this metric effectively to ensure efficient working capital management and optimize its liquidity position.