Terex Corporation (TEX)
Activity ratios
Short-term
Turnover ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 3.35 | 3.58 | 3.46 | 3.40 | 3.59 | 3.45 | 3.44 | 3.54 | 3.85 | 3.94 | 3.87 | 3.84 | 4.16 | 4.12 | 4.02 | 3.97 | 4.09 | 4.18 | 4.20 | 3.73 |
| Receivables turnover | 9.40 | 7.98 | 7.31 | 7.38 | 8.07 | 7.89 | 7.27 | 7.66 | 7.66 | 7.17 | 6.32 | 6.36 | 8.07 | 7.87 | 9.77 | 10.07 | 10.83 | 8.32 | 6.67 | 6.41 |
| 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 |
| Working capital turnover | 4.58 | 4.35 | 4.35 | 4.47 | 4.59 | 4.58 | 4.26 | 4.40 | 4.53 | 3.46 | 3.29 | 2.92 | 2.66 | 2.94 | 3.33 | 3.40 | 3.79 | 3.68 | 3.21 | 3.02 |
Activity ratios provide insight into how efficiently a company is managing its assets and liabilities. Let's analyze the activity ratios of Terex Corp. based on the provided data.
1. Inventory turnover: This ratio measures how many times inventory is sold and replaced during a specific period. Terex Corp.'s inventory turnover has been fairly consistent, ranging from 3.35 to 3.59 over the past 8 quarters. A higher turnover indicates efficient inventory management.
2. Receivables turnover: This ratio reflects how many times receivables are collected within a period. Terex Corp.'s receivables turnover has varied, with values between 7.31 and 9.40. Higher turnover values suggest effective collection efforts.
3. Payables turnover: This ratio demonstrates how quickly the company pays its suppliers. Terex Corp.'s payables turnover has fluctuated between 5.37 and 5.98. A higher turnover implies the company is managing its payables efficiently.
4. Working capital turnover: This ratio evaluates how well the company generates sales from its working capital. Terex Corp.'s working capital turnover has remained relatively stable, with values ranging from 4.26 to 4.59. A higher turnover signifies effective utilization of working capital.
Overall, Terex Corp. has shown consistent efficiency in managing its inventory, receivables, payables, and working capital over the eight quarters, indicating good operational control and financial health. However, trend analysis over a longer period can provide more insights into the company's activity efficiency and sustainability.
Average number of days
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 108.91 | 102.00 | 105.47 | 107.24 | 101.72 | 105.88 | 106.07 | 103.24 | 94.88 | 92.55 | 94.37 | 95.08 | 87.82 | 88.67 | 90.84 | 92.05 | 89.29 | 87.40 | 86.86 | 97.79 |
| Days of sales outstanding (DSO) | days | 38.81 | 45.75 | 49.96 | 49.45 | 45.24 | 46.26 | 50.20 | 47.66 | 47.68 | 50.87 | 57.73 | 57.36 | 45.23 | 46.36 | 37.34 | 36.23 | 33.70 | 43.84 | 54.68 | 56.91 |
| Number of days of payables | days | 64.52 | 61.03 | 64.89 | 67.98 | 64.28 | 63.60 | 66.58 | 64.04 | 62.72 | 67.92 | 72.76 | 68.41 | 53.22 | 47.13 | 45.40 | 50.88 | 53.52 | 56.90 | 61.22 | 66.23 |
The activity ratios for Terex Corp. provide insights into the efficiency of the company's operations.
Days of inventory on hand (DOH) measures how many days it takes for the company to sell its inventory. In Q4 2023, the DOH was 108.91 days, indicating that the company holds inventory for approximately 108.91 days before selling it. There has been a slight increase in DOH compared to the previous quarters, which suggests that the company may be facing challenges in managing its inventory levels efficiently.
Days of sales outstanding (DSO) calculates the average number of days it takes for the company to collect its accounts receivable. In Q4 2023, the DSO was 38.81 days, showing an improvement in the collection of receivables compared to the previous quarters. A lower DSO indicates that the company is collecting payments from customers more quickly.
Number of days of payables measures the average number of days it takes for the company to pay its suppliers. In Q4 2023, the number of days of payables was 64.52 days, which has increased slightly compared to the previous quarters. This indicates that the company is taking a longer time to pay its suppliers.
Overall, the changes in these activity ratios suggest that Terex Corp. may be experiencing challenges in managing its inventory efficiently, but it has improved its collection of receivables. However, the company's payment to suppliers has slightly increased, indicating a potential strain on its working capital management.
Long-term
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 9.04 | 10.28 | 10.14 | 9.71 | 9.49 | 9.30 | 9.20 | 9.28 | 9.05 | 8.93 | 8.35 | 7.83 | 7.57 | 7.90 | 8.57 | 10.42 | 11.18 | 11.39 | 12.66 | 12.95 |
| Total asset turnover | 1.42 | 1.49 | 1.46 | 1.42 | 1.42 | 1.41 | 1.36 | 1.37 | 1.36 | 1.20 | 1.13 | 1.05 | 1.01 | 1.09 | 1.20 | 1.30 | 1.36 | 1.30 | 1.19 | 1.16 |
Terex Corp.'s long-term activity ratios, the fixed asset turnover and total asset turnover, provide insight into how efficiently the company is utilizing its fixed assets and total assets to generate revenue.
The fixed asset turnover ratio measures the company's ability to generate sales revenue from its investments in fixed assets. The trend over the last eight quarters indicates consistent performance, with values ranging from 9.04 to 10.28. This indicates that, on average, for each dollar invested in fixed assets, Terex Corp. is generating sales between 9.04 and 10.28 dollars. The higher the fixed asset turnover ratio, the more efficiently the company is utilizing its fixed assets to generate revenue.
On the other hand, the total asset turnover ratio assesses how well the company is using all its assets to generate sales. The trend also shows stability over the quarters, with values fluctuating around 1.42 to 1.49. This suggests that, on average, Terex Corp. generates revenue equivalent to 1.42 to 1.49 times its total assets. A higher total asset turnover ratio indicates that the company is more efficient in generating sales revenue from its total asset base.
Overall, Terex Corp. exhibits steady performance in both fixed asset turnover and total asset turnover ratios, indicating effective utilization of both fixed and total assets to generate sales revenue over the quarters analyzed. This consistent performance suggests sound asset management and operational efficiency within the company.