Terex Corporation (TEX)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 103.14 | 108.90 | 101.72 | 94.88 | 87.82 |
| Days of sales outstanding (DSO) | days | 45.78 | 38.82 | 45.24 | 47.68 | 45.23 |
| Number of days of payables | days | 52.16 | 64.55 | 64.28 | 62.72 | 53.22 |
| Cash conversion cycle | days | 96.76 | 83.17 | 82.68 | 79.85 | 79.83 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 103.14 + 45.78 – 52.16
= 96.76
The cash conversion cycle of Terex Corporation has shown a slight increase over the analyzed period, rising from 79.83 days on December 31, 2020, to 96.76 days on December 31, 2024. This indicates that the company is taking longer to convert its investments in raw materials and other inputs into cash receipts from sales. The trend suggests potential inefficiencies in the company's working capital management or possible challenges in its supply chain or customer payment processes. Terex may need to focus on streamlining its operations to shorten its cash conversion cycle and improve its liquidity position.