Terex Corporation (TEX)
Activity ratios
Short-term
Turnover ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 3.54 | 3.25 | 3.25 | 3.30 | 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 |
| Receivables turnover | 7.97 | 7.63 | 7.21 | 7.60 | 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 |
| Payables turnover | 7.00 | 6.70 | 5.69 | 5.74 | 5.65 | 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 |
| Working capital turnover | 4.11 | 3.69 | 3.95 | 4.06 | 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 |
Terex Corporation's activity ratios provide insights into how efficiently the company is managing its inventory, receivables, payables, and working capital.
1. Inventory Turnover: The inventory turnover ratio has remained within a range of 3.25 to 4.16 over the past few years. A decreasing trend is observed from March 31, 2022, to December 31, 2024, indicating that inventory is being sold at a slower rate compared to the previous periods.
2. Receivables Turnover: The receivables turnover ratio fluctuates between 6.32 and 9.77 during the analyzed periods. There is a noticeable decrease in turnover from March 31, 2023, to June 30, 2024, suggesting a longer time taken to collect receivables, which could potentially cause cash flow issues.
3. Payables Turnover: Terex Corporation's payables turnover ratio ranges from 5.02 to 8.04. The company's ability to pay its suppliers within a specific period has decreased from December 31, 2023, to December 31, 2024, indicating potential liquidity challenges.
4. Working Capital Turnover: The working capital turnover ratio has shown a fluctuating pattern, ranging from 2.66 to 4.59. An increasing trend is observed from March 31, 2020, to December 31, 2024, reflecting an improvement in utilizing working capital to generate sales.
Overall, the analysis of Terex Corporation's activity ratios suggests that the company may need to focus on improving inventory management, accelerating receivables collection, maintaining efficient payables management, and optimizing the utilization of working capital to enhance operational efficiency and financial performance.
Average number of days
| 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 | 103.13 | 112.19 | 112.31 | 110.73 | 108.89 | 101.99 | 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 |
| Days of sales outstanding (DSO) | days | 45.77 | 47.87 | 50.62 | 48.03 | 38.83 | 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 |
| Number of days of payables | days | 52.15 | 54.44 | 64.11 | 63.60 | 64.55 | 61.02 | 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 |
Terex Corporation's activity ratios indicate the efficiency with which the company manages its working capital and operations.
1. Days of Inventory on Hand (DOH): Terex's DOH has shown a fluctuating trend over the years, with an average of around 100 days by the end of the period. The increase in DOH from 2020 to 2024 suggests that Terex may be holding onto inventory for a longer period, which could tie up capital and potentially lead to higher storage costs.
2. Days of Sales Outstanding (DSO): Terex's DSO has ranged from around 35 to 60 days over the years. A decrease in DSO from 2020 to 2024 indicates that the company is collecting its accounts receivable faster, which is a positive sign as it improves cash flow and liquidity.
3. Number of Days of Payables: Terex's payables days have also shown some variation but generally have decreased from almost 70 days in 2021 to around 50 days by the end of 2024. A lower number of days of payables means that the company is taking less time to pay its suppliers, which could potentially strain relationships but also indicates a more efficient management of working capital.
Overall, these activity ratios suggest that Terex Corporation has been working on improving its working capital efficiency by reducing days of sales outstanding and paying its suppliers faster, although there may be room for optimization in managing its inventory levels.
Long-term
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 7.18 | 8.49 | 9.03 | 9.08 | 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 |
| Total asset turnover | 0.89 | 1.35 | 1.37 | 1.39 | 1.43 | 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 |
The Fixed Asset Turnover ratio for Terex Corporation has shown a declining trend from 10.42 in March 2020 to 7.18 in December 2024. This indicates that the efficiency of generating sales from fixed assets has decreased over the years, with a slight increase observed in the most recent period.
On the other hand, the Total Asset Turnover ratio of Terex Corporation has fluctuated but generally remained relatively stable, ranging from 0.89 in December 2024 to 1.49 in September 2023. This ratio reflects the company's ability to generate sales from all its assets, both fixed and current.
Overall, the declining trend in Fixed Asset Turnover suggests that Terex may be facing challenges in efficiently utilizing its fixed assets to generate sales, while the stable Total Asset Turnover indicates a consistent performance in generating sales in relation to its total assets. It may be beneficial for Terex to analyze the reasons behind the decreasing Fixed Asset Turnover ratio and make strategic decisions to improve asset utilization efficiency in the long term.