Terex Corporation (TEX)
Cash conversion cycle
| 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 |
| Cash conversion cycle | days | 96.75 | 105.62 | 98.82 | 95.16 | 83.18 | 86.72 | 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 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 103.13 + 45.77 – 52.15
= 96.75
The cash conversion cycle for Terex Corporation has fluctuated over the periods provided. The cash conversion cycle represents the number of days it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a low of 75.51 days to a high of 105.62 days. The cycle peaked in the third quarter of 2024, indicating a prolonged period for Terex to convert its investments into cash.
The trend observed shows some variability quarter by quarter, with some periods exhibiting longer cash conversion cycles than others. An increasing trend towards the end of the time frame suggests potential challenges in managing working capital efficiently.
A longer cash conversion cycle may indicate inefficiencies in managing inventory, accounts receivable, and accounts payable, leading to potential cash flow issues or a need for additional working capital.
Terex Corporation may want to focus on optimizing its inventory management, accelerating the collection of accounts receivable, and effectively managing accounts payable to reduce the cash conversion cycle and improve overall cash flow efficiency.