Tennant Company (TNC)
Payables turnover
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 1,086,100 | 1,066,300 | 1,039,200 | 1,022,300 | 997,500 | 1,008,600 | 1,015,800 | 1,014,100 | 997,900 | 992,800 | 906,600 | 775,700 | 700,100 | 608,300 | 616,700 | 671,100 | 676,100 | 672,900 | 673,000 | 669,100 |
| Payables | US$ in thousands | 111,400 | 98,500 | 113,000 | 117,600 | 126,100 | 110,000 | 120,400 | 120,000 | 121,500 | 117,400 | 118,500 | 104,800 | 106,300 | 86,000 | 77,400 | 95,800 | 94,100 | 93,900 | 98,700 | 94,900 |
| Payables turnover | 9.75 | 10.83 | 9.20 | 8.69 | 7.91 | 9.17 | 8.44 | 8.45 | 8.21 | 8.46 | 7.65 | 7.40 | 6.59 | 7.07 | 7.97 | 7.01 | 7.18 | 7.17 | 6.82 | 7.05 |
December 31, 2023 calculation
Payables turnover = Cost of revenue (ttm) ÷ Payables
= $1,086,100K ÷ $111,400K
= 9.75
The payables turnover ratio measures how efficiently a company is managing its accounts payable by calculating how many times it pays off its suppliers in a given period. A higher payables turnover ratio indicates that the company is paying off its suppliers more frequently, which could signal strong liquidity and effective working capital management.
Based on the data provided for Tennant Co., we can observe fluctuations in the payables turnover ratio over the past eight quarters. The ratio ranged from a low of 5.32 in Q4 2022 to a high of 7.22 in Q3 2023. Generally, a higher payables turnover ratio is preferred as it implies that the company is paying off its suppliers more quickly.
In the most recent quarter, Q4 2023, Tennant Co. had a payables turnover ratio of 6.43, indicating that the company paid off its suppliers approximately 6.43 times during that quarter. This suggests that Tennant Co. has been effectively managing its accounts payable and maintaining a healthy relationship with its suppliers.
However, it is essential to consider industry benchmarks and trends over time when evaluating the payables turnover ratio. Fluctuations in the ratio could be due to changes in payment terms, business cycles, or other factors that may impact the company's working capital management.
Overall, Tennant Co.'s payables turnover ratio has shown variability over the past quarters, but the recent ratio of 6.43 in Q4 2023 reflects efficient management of accounts payable, which is a positive indicator of the company's financial health.
Peer comparison
Dec 31, 2023