Terex Corporation (TEX)

Cash conversion cycle

		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
Cash conversion cycle	days	83.20	86.73	90.54	88.70	82.68	88.54	89.69	86.86	79.85	75.51	79.34	84.04	79.83	87.89	82.79	77.40	69.47	74.34	80.33	88.46

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 108.91 + 38.81 – 64.52
= 83.20

The cash conversion cycle of Terex Corp. over the past eight quarters has shown fluctuations within a relatively narrow range, indicating a stable working capital management. The average cash conversion cycle over this period is approximately 87.30 days.

Terex Corp.'s cash conversion cycle measures the number of days it takes for the company to convert its investments in inventory and accounts receivable into cash flow from sales. A longer cash conversion cycle suggests that the company is taking longer to collect cash from its sales or is holding excess inventory.

Terex Corp. has maintained a consistent cash conversion cycle around the 87-day mark, indicating a well-balanced management of its working capital. It is crucial for the company to monitor this metric closely to ensure efficient utilization of its resources and maintain healthy liquidity levels. A decreasing trend in the cash conversion cycle could indicate improvements in inventory management and accounts receivable collection processes, while an increasing trend may require closer scrutiny to identify areas for operational enhancement.