Terex Corporation (TEX)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,974,900 | 3,546,500 | 3,129,400 | 2,537,100 | 3,465,300 |
| Payables | US$ in thousands | 702,600 | 624,600 | 537,700 | 369,900 | 508,100 |
| Payables turnover | 5.66 | 5.68 | 5.82 | 6.86 | 6.82 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $3,974,900K ÷ $702,600K
= 5.66
The payables turnover ratio for Terex Corp. has been relatively stable over the past five years. The ratio measures how efficiently the company is managing its accounts payable by indicating the number of times the company pays off its suppliers within a given period.
Terex Corp.'s payables turnover ranged from 5.66 to 6.86 over the last five years. A higher payables turnover ratio generally indicates that the company is paying its suppliers more quickly, which may suggest strong liquidity or favorable credit terms.
The decreasing trend in the payables turnover ratio from 2019 to 2023 could indicate that Terex Corp. is taking longer to pay its suppliers over time. This could be due to various factors such as changes in payment terms or cash flow constraints. It is essential for investors and analysts to further investigate the reasons behind this trend to understand the company's financial health and vendor management practices.