Nextracker Inc. Class A Common Stock (NXT)

Short-term

Turnover ratios

Nextracker Inc.'s Inventory Turnover ratio indicates the efficiency of the company in managing its inventory. The trend shows a fluctuation over the years, with a decrease from 11.41 in March 2021 to 7.61 in March 2022, followed by an increase to 11.70 in March 2023, and then a decrease again to 8.36 in March 2024, and finally an increase to 9.31 in March 2025.

The Receivables Turnover ratio reflects how effectively Nextracker Inc. is collecting its accounts receivables. The data illustrates a significant variability in this ratio, starting at 4.46 in March 2021, dropping to 3.16 in March 2022, slightly increasing to 3.34 in March 2023, dropping further to 3.21 in March 2024, and then experiencing a significant jump to 6.26 in March 2025.

The Payables Turnover ratio showcases Nextracker Inc.'s ability to manage its accounts payable. There is inconsistency in this ratio over the years, with a slight increase from 4.16 in March 2021 to 4.92 in March 2022, followed by a significant rise to 7.64 in March 2023, then a steep decline to 3.69 in March 2024, and a further decrease to 3.33 in March 2025.

Lastly, the Working Capital Turnover ratio demonstrates how efficiently Nextracker Inc. is using its working capital to generate revenue. The trend for this ratio indicates a decline over the years, decreasing from 6.23 in March 2021 to 6.06 in March 2022, followed by a further drop to 5.21 in March 2023, then a significant decrease to 2.85 in March 2024, and finally declining to 2.63 in March 2025.

Overall, the analysis of Nextracker Inc.'s activity ratios suggests that there have been fluctuations in the company's efficiency in managing its inventory, receivables, payables, and working capital turnover over the years.

---

Average number of days

Nextracker Inc.'s activity ratios reveal important insights into its operational efficiency and management of working capital.

1. Days of Inventory on Hand (DOH):
- The trend in DOH shows fluctuations over the years, ranging from 31.20 days to 47.96 days.
- A lower DOH indicates that the company is able to convert inventory into sales quickly, which can positively impact cash flow and reduce holding costs.
- In the most recent year, DOH decreased to 39.19 days, suggesting improved inventory management efficiency compared to the previous year.

2. Days of Sales Outstanding (DSO):
- DSO measures the average number of days it takes for the company to collect revenue after a sale is made.
- Nextracker's DSO ranged from 58.28 days to 115.37 days across the years.
- A lower DSO implies quicker cash conversion and efficient credit management practices, which can enhance liquidity.
- The latest DSO figure of 58.28 days indicates a notable improvement in collecting sales revenues promptly.

3. Number of Days of Payables:
- This ratio indicates the average number of days the company takes to pay its suppliers.
- Nextracker's payables days varied from 47.76 days to 109.54 days over the analyzed period.
- A higher number of days of payables may suggest the company is using supplier credit effectively, but it could also potentially strain supplier relationships.
- The significant increase in payables days in the latest year to 109.54 days might signal a shift towards utilizing supplier credit to manage cash flow or renegotiating payment terms.

In summary, analyzing Nextracker Inc.'s activity ratios provides a comprehensive view of its inventory turnover, accounts receivable collection efficiency, and management of payables. The trends observed in these metrics can offer insights into the company's operational effectiveness and its ability to optimize working capital management for sustainable growth.

---

Long-term

Nextracker Inc. Class A Common Stock's long-term activity ratios provide insights into the company's efficiency in utilizing its assets to generate sales.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how efficiently the company generates sales from its investment in fixed assets.
- Nextracker Inc. had a high fixed asset turnover ratio of 127.94 in March 2021, indicating that the company generated significant revenue relative to its investment in fixed assets.
- The ratio slightly decreased to 123.71 in March 2022, still reflecting a strong efficiency in utilizing fixed assets.
- However, there is no data available for fixed asset turnover for the years 2023, 2024, and 2025, limiting the trend analysis for these periods.

2. Total Asset Turnover:
- The total asset turnover ratio measures the company's ability to generate sales from all its assets, including fixed and current assets.
- Nextracker Inc.'s total asset turnover ratio increased from 1.36 in March 2021 to 1.43 in March 2022, indicating an improvement in using its assets to generate revenue.
- However, the ratio declined to 1.34 in March 2023, and significantly dropped to 0.99 in March 2024, suggesting a decrease in overall asset utilization efficiency.
- By March 2025, the total asset turnover ratio further decreased to 0.93, indicating a continued trend of lower revenue generation relative to total assets.

In summary, Nextracker Inc. Class A Common Stock's fixed asset turnover remained high in the initial years analyzed, while the total asset turnover showed fluctuations over the same period, with a noticeable decline in recent years. This may indicate a potential issue with asset utilization efficiency that the company should address to improve its long-term performance.