Teradyne Inc (TER)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 92.89 | 93.65 | 240.41 | 101.26 | 99.61 | 277.62 | 105.79 | 102.73 | 92.11 | 84.99 | 78.63 | 64.10 | 59.36 | 56.55 | 57.78 | 70.60 | 60.72 | 53.80 | 64.05 | 63.76 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 92.89 | 93.65 | 240.41 | 101.26 | 99.61 | 277.62 | 105.79 | 102.73 | 92.11 | 84.99 | 78.63 | 64.10 | 59.36 | 56.55 | 57.78 | 70.60 | 60.72 | 53.80 | 64.05 | 63.76 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 92.89 + — – —
= 92.89
The cash conversion cycle of Teradyne Inc has shown fluctuating trends over the reported periods. The company's cash conversion cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
From March 2020 to June 2022, the cash conversion cycle remained relatively stable, ranging between 53.80 days and 78.63 days. This indicates that Teradyne was efficiently managing its inventory, accounts receivable, and accounts payable during this period.
However, from September 2022 to June 2024, there was a significant increase in the cash conversion cycle, reaching a peak of 277.62 days in September 2023. This substantial increase suggests that Teradyne might have been facing challenges in managing its working capital effectively, possibly due to inventory build-up, slower collection of receivables, or delays in paying suppliers.
The decrease in the cash conversion cycle from September 2024 to December 2024 to 92.89 days indicates that Teradyne made improvements in its working capital management, resulting in a quicker conversion of resources into cash.
Overall, the fluctuating cash conversion cycle of Teradyne Inc highlights the importance of monitoring working capital efficiency continuously to ensure optimal cash flow management and operational performance.
Peer comparison
Dec 31, 2024