Terex Corporation (TEX)
Payables turnover
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 3,974,900 | 3,997,000 | 3,882,800 | 3,686,800 | 3,546,500 | 3,382,500 | 3,314,400 | 3,257,300 | 3,129,400 | 2,948,700 | 2,752,700 | 2,529,000 | 2,537,100 | 2,616,000 | 2,811,700 | 3,263,400 | 3,465,300 | 3,583,100 | 3,626,800 | 3,566,100 |
| Payables | US$ in thousands | 702,600 | 668,300 | 690,300 | 686,700 | 624,600 | 589,400 | 604,600 | 571,500 | 537,700 | 548,700 | 548,700 | 474,000 | 369,900 | 337,800 | 349,700 | 454,900 | 508,100 | 558,600 | 608,300 | 647,100 |
| Payables turnover | 5.66 | 5.98 | 5.62 | 5.37 | 5.68 | 5.74 | 5.48 | 5.70 | 5.82 | 5.37 | 5.02 | 5.34 | 6.86 | 7.74 | 8.04 | 7.17 | 6.82 | 6.41 | 5.96 | 5.51 |
December 31, 2023 calculation
Payables turnover = Cost of revenue (ttm) ÷ Payables
= $3,974,900K ÷ $702,600K
= 5.66
The payables turnover ratio of Terex Corp. fluctuated over the past eight quarters, ranging from a low of 5.37 in Q1 2023 to a high of 5.98 in Q3 2023. This ratio indicates how efficiently the company is managing its trade payables by measuring the number of times the company pays off its suppliers during a specific period.
A higher payables turnover ratio generally implies that the company is paying off its suppliers more frequently, which could indicate good relationships with suppliers or efficient cash flow management. Conversely, a lower ratio may suggest that the company is taking longer to settle its payables, which could potentially strain relationships with suppliers or signal liquidity issues.
Overall, Terex Corp. has maintained a relatively stable payables turnover ratio around the 5.5 to 6 range, indicating a consistent approach to managing its trade payables over the analyzed period. Further investigation into the company's payment terms, supplier relationships, and industry benchmarks could provide additional insights into the effectiveness of its payables management strategy.