Terex Corporation (TEX)
Payables turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 4,059,000 | 3,975,000 | 3,546,500 | 3,129,400 | 2,537,100 |
| Payables | US$ in thousands | 580,000 | 703,000 | 624,600 | 537,700 | 369,900 |
| Payables turnover | 7.00 | 5.65 | 5.68 | 5.82 | 6.86 |
December 31, 2024 calculation
Payables turnover = Cost of revenue ÷ Payables
= $4,059,000K ÷ $580,000K
= 7.00
Based on the data provided, Terex Corporation's payables turnover has exhibited a decreasing trend over the years. In 2020, the payables turnover was 6.86, indicating that the company converted its accounts payable nearly 6.86 times during that period. However, by the end of 2024, the payables turnover had decreased to 5.82, suggesting a slowdown in the rate at which Terex is paying off its suppliers.
The decreasing trend in payables turnover may indicate that Terex is taking longer to settle its accounts payable obligations, potentially signaling liquidity or cash flow challenges. A lower payables turnover ratio could also imply that the company is extending its payment terms with suppliers, which could impact relationships or indicate financial stress.
The slight increase in payables turnover in 2024 to 7.00 could be seen as a positive sign as it suggests the company improved its efficiency in paying off its suppliers during that period. However, it's essential to analyze the underlying reasons for these fluctuations to gain a comprehensive understanding of Terex Corporation's financial performance and management of its accounts payable.