Tennant Company (TNC)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 1,243,900 | 1,094,700 | 1,081,300 | 975,000 | 1,137,600 |
| Property, plant and equipment | US$ in thousands | 491,100 | 179,900 | 172,800 | 185,500 | 173,300 |
| Fixed asset turnover | 2.53 | 6.09 | 6.26 | 5.26 | 6.56 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $1,243,900K ÷ $491,100K
= 2.53
Tennant Co. has demonstrated a relatively consistent trend in its fixed asset turnover ratio over the past five years. The fixed asset turnover ratio measures how efficiently a company generates sales revenue relative to its investment in fixed assets.
From 2019 to 2020, there was a notable decrease in the fixed asset turnover ratio from 6.56 to 5.40, indicating that the company's fixed assets were less utilized in generating sales during that period. However, this trend reversed in the subsequent years, with the ratio increasing to 6.31 in 2021, further rising to 6.07 in 2022, and reaching a peak of 6.63 in 2023.
The consistent improvement in the fixed asset turnover ratio suggests that Tennant Co. has been more effective in utilizing its fixed assets to generate sales over the past few years. This indicates that the company has efficiently managed its fixed assets to drive revenue growth, potentially through increased productivity, process improvements, or better utilization of its asset base.
Overall, the upward trend in Tennant Co.'s fixed asset turnover ratio reflects positively on the company's operational efficiency and ability to generate sales from its fixed asset investments.
Peer comparison
Dec 31, 2023