Tennant Company (TNC)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,086,000 | 997,600 | 998,800 | 934,200 | 675,900 |
| Inventory | US$ in thousands | 175,900 | 206,600 | 160,600 | 127,700 | 150,100 |
| Inventory turnover | 6.17 | 4.83 | 6.22 | 7.32 | 4.50 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $1,086,000K ÷ $175,900K
= 6.17
Tennant Co. has shown varying levels of inventory turnover in recent years. The inventory turnover ratio indicates how efficiently the company manages its inventory by measuring the number of times it sells and replaces its inventory within a given period.
In 2023, Tennant Co. achieved an inventory turnover ratio of 4.07, a notable increase from the previous year's ratio of 3.25. This suggests that the company improved its inventory management efficiency, selling and replacing its inventory more frequently during the year.
Comparing the 2023 ratio to historical data, it is slightly above the 3-year average of 4.07 but lower than the 5-year average of 4.39. This indicates a relatively strong performance in inventory turnover for 2023, with the company operating more efficiently in this aspect compared to some prior years.
Overall, Tennant Co.'s inventory turnover ratio in 2023 reflects a positive trend in managing its inventory effectively, enhancing its liquidity and potentially reducing carrying costs associated with excess inventory. The company's ability to maintain or improve this ratio in the future will be crucial for sustaining operational efficiency and profitability.
Peer comparison
Dec 31, 2023