Terex Corporation (TEX)

Receivables turnover

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Revenue US$ in thousands 5,151,500 4,417,700 3,886,800 3,076,400 4,353,100
Receivables US$ in thousands 547,800 547,500 507,700 381,200 401,900
Receivables turnover 9.40 8.07 7.66 8.07 10.83

December 31, 2023 calculation

Receivables turnover = Revenue ÷ Receivables
= $5,151,500K ÷ $547,800K
= 9.40

The receivables turnover ratio of Terex Corp. has shown fluctuations over the past five years. In 2023, the receivables turnover ratio increased to 9.40 from 8.07 in 2022, indicating that the company collected its accounts receivable more efficiently during the year. This improvement suggests that Terex Corp. has been able to convert its accounts receivable into cash at a faster rate in 2023 compared to the previous year.

Looking back, the receivables turnover ratio was 8.07 in both 2022 and 2020, with a slight dip in 2020 compared to 2019 when the ratio was 10.83. The ratio dropped to 7.66 in 2021 but then recovered in 2022. This variability in the receivables turnover ratio could indicate changes in the company's credit policy, customer payment behavior, or the efficiency of its accounts receivable management.

Overall, a higher receivables turnover ratio suggests that Terex Corp. is efficiently managing its accounts receivable and collecting payments from customers in a timely manner. However, it is essential for the company to maintain consistency in this ratio to ensure a healthy cash flow and liquidity position.