Nextracker Inc. Class A Common Stock (NXT)

Cash conversion cycle

		Mar 31, 2025	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021
Days of inventory on hand (DOH)	days	39.19	43.65	31.20	47.96	32.00
Days of sales outstanding (DSO)	days	58.28	113.86	109.21	115.37	81.88
Number of days of payables	days	109.54	98.81	47.76	74.25	87.67
Cash conversion cycle	days	-12.07	58.70	92.64	89.08	26.20

March 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 39.19 + 58.28 – 109.54
= -12.07

The cash conversion cycle of Nextracker Inc. Class A Common Stock has shown notable fluctuations over the past five years.

As of March 31, 2021, the company had a relatively efficient cash conversion cycle of 26.20 days, indicating a quick turnover of cash from operations to suppliers and back.

However, there was a substantial increase in the cash conversion cycle to 89.08 days by March 31, 2022, followed by a further rise to 92.64 days by March 31, 2023. These increases suggest delays in converting raw materials into finished products and subsequently into cash, which could impact the company's liquidity and working capital management.

By March 31, 2024, Nextracker Inc.'s cash conversion cycle improved to 58.70 days, indicating a more efficient management of working capital.

Surprisingly, by March 31, 2025, the cash conversion cycle turned negative to -12.07 days. A negative cash conversion cycle implies that the company is receiving cash from customers before needing to pay its suppliers, potentially indicating strong bargaining power or efficient operations.

Overall, the fluctuation in Nextracker Inc.'s cash conversion cycle over the years highlights the importance of monitoring working capital management and efficiency in converting inputs into revenue.