Teradyne Inc (TER)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 93.04 | 99.29 | 92.11 | 59.36 | 60.72 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 93.04 | 99.29 | 92.11 | 59.36 | 60.72 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 93.04 + — – —
= 93.04
Teradyne Inc's cash conversion cycle has shown fluctuations over the years. The cycle decreased from 60.72 days in 2020 to 59.36 days in 2021, indicating an improvement in the company's ability to convert its investments in inventory and accounts receivable into cash. However, in 2022, the cycle increased significantly to 92.11 days, suggesting a potential inefficiency in managing working capital.
Subsequently, the cycle further increased to 99.29 days in 2023, indicating a prolonged time taken to convert investments into cash. Despite a slight decrease to 93.04 days in 2024, the company still faces challenges in efficiently converting its assets into cash. These fluctuations in the cash conversion cycle highlight the importance of closely monitoring working capital management to ensure optimal cash flow efficiency.
Peer comparison
Dec 31, 2024