Tennant Company (TNC)
Working capital 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 |
| Total current assets | US$ in thousands | 569,100 | 575,300 | 526,800 | 493,600 | 481,000 |
| Total current liabilities | US$ in thousands | 273,700 | 261,600 | 290,300 | 254,300 | 274,900 |
| Working capital turnover | 4.21 | 3.49 | 4.57 | 4.07 | 5.52 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,243,900K ÷ ($569,100K – $273,700K)
= 4.21
Tennant Co.'s working capital turnover has fluctuated over the past five years, ranging from a low of 3.48 in 2022 to a high of 5.52 in 2019. The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales revenue. A higher ratio indicates a more efficient use of working capital.
In 2023, Tennant Co. achieved a working capital turnover of 4.21, which indicates that the company generated $4.21 in sales revenue for every dollar of working capital invested. This is an improvement compared to the previous year but lower than the peak performance in 2019.
The trend of Tennant Co.'s working capital turnover suggests that the company has been relatively effective in managing its working capital resources to drive sales. However, it is essential for the company to monitor and potentially optimize its working capital efficiency to sustain or improve its operational performance over time.
Peer comparison
Dec 31, 2023