Nextracker Inc. Class A Common Stock (NXT)

Short-term

Turnover ratios

Nextracker Inc.'s inventory turnover ratio has remained relatively stable over the past three quarters, averaging around 8.41. This indicates that the company efficiently sells and replenishes its inventory approximately 8.41 times a year.

In contrast, the receivables turnover ratio has shown some fluctuations, decreasing from 6.01 in September 2023 to 4.77 in March 2024. This suggests that the average collection period for the company's receivables has lengthened, indicating a potential issue with collecting payments from customers in a timely manner.

Similarly, the payables turnover ratio has also declined over the quarters, from 4.09 in September 2023 to 3.69 in March 2024. This indicates that the company is taking longer to pay its suppliers, which could impact relationships and potentially signal cash flow issues.

The working capital turnover ratio has shown a consistent decline over the quarters, decreasing from 3.68 in September 2023 to 2.85 in March 2024. This implies that the company is generating less revenue relative to its working capital, potentially indicating inefficiencies in the utilization of its current assets to generate sales.

Overall, while the inventory turnover ratio reflects efficient management of inventory, the decreasing trends in receivables turnover, payables turnover, and working capital turnover ratios suggest areas of concern that may require further investigation and management attention to improve the company's overall efficiency and financial health.

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Average number of days

Based on the provided data for Nextracker Inc.'s activity ratios, we can analyze the efficiency of the company's operations over the three most recent quarters.

1. Days of Inventory on Hand (DOH):
- The Days of Inventory on Hand increased slightly from 43.04 days in December 2023 to 43.65 days in March 2024. This indicates that the company took slightly longer to sell its inventory in the most recent quarter.
- However, the level of inventory has been relatively consistent over the periods, indicating stable inventory management practices.

2. Days of Sales Outstanding (DSO):
- The Days of Sales Outstanding increased significantly from 58.43 days in December 2023 to 76.52 days in March 2024. This suggests that the company's collection period for accounts receivable has increased, which could impact cash flows and liquidity.
- The significant increase in DSO may indicate potential issues with credit policies or customer payment delays.

3. Number of Days of Payables:
- The Number of Days of Payables also increased from 79.62 days in December 2023 to 98.81 days in March 2024. This indicates that the company took longer to pay its suppliers in the most recent quarter.
- The increase in Days of Payables could be a strategic approach to managing cash flows or it could be due to negotiated terms with suppliers.

Overall, Nextracker Inc. should monitor its activity ratios closely to ensure efficient management of inventory, receivables, and payables. Increases in DSO and Days of Payables can impact working capital and cash flow, so it is essential for the company to evaluate and address any underlying issues that may be contributing to these trends.

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Long-term

Nextracker Inc.'s Class A Common Stock's fixed asset turnover ratios have been relatively stable over the past three quarters, with values of 270.66, 272.64, and 279.30 as of March 31, 2024, December 31, 2023, and September 30, 2023, respectively. This ratio measures how efficiently the company is generating sales from its fixed assets. The steady values suggest that the company is effectively utilizing its fixed assets to generate revenues.

In contrast, the total asset turnover ratio has shown some fluctuations during the same period, with figures of 0.99, 1.09, and 1.03 as of March 31, 2024, December 31, 2023, and September 30, 2023, respectively. This ratio indicates how well the company is using its total assets to generate sales. While the ratios fluctuate, they are within a close range, suggesting that Nextracker Inc. is managing its total assets reasonably well to generate revenues.

Overall, based on the analysis of the long-term activity ratios, Nextracker Inc. Class A Common Stock appears to be efficiently utilizing both its fixed assets and total assets to generate sales, with consistent performance in fixed asset turnover and relatively stable total asset turnover metrics.