Tennant Company (TNC)
Payables 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 |
| Payables | US$ in thousands | 111,400 | 126,100 | 121,500 | 106,300 | 94,100 |
| Payables turnover | 9.75 | 7.91 | 8.22 | 8.79 | 7.18 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $1,086,000K ÷ $111,400K
= 9.75
Tennant Co.'s payables turnover ratio has fluctuated over the past five years, ranging from 5.32 to 7.18. The ratio indicates the number of times a company pays off its accounts payable during a period. A higher ratio signifies a faster turnover of payables, potentially indicating efficient management of supplier payments.
In this case, Tennant Co. has experienced variation in its payables turnover, with a peak in 2019 at 7.18, which then decreased in subsequent years before reaching 6.43 in 2023. This fluctuation may suggest changes in the company's relationship with suppliers, payment terms, or purchasing practices over the years. Further investigation and analysis of the company's financial and operational strategies are warranted to understand the reasons behind these fluctuations and assess the overall effectiveness of Tennant Co.'s payables management.
Peer comparison
Dec 31, 2023