Tennant Company (TNC)

The current ratio for Tennant Company has fluctuated over the years, ranging from a low of 1.81 in December 31, 2021 to a high of 2.20 in December 31, 2022. This indicates the company's ability to cover its short-term liabilities with its current assets improved from 2021 to 2022 but decreased slightly in the following years.

The quick ratio, a more stringent measure of liquidity, shows a similar trend as the current ratio with a decrease from 0.55 in December 31, 2020 to 0.11 in December 31, 2024. This may suggest a potential liquidity challenge for the company, especially in the most recent year.

The cash ratio also demonstrates a decreasing trend over the same period, aligning with the quick ratio results and reinforcing the potential liquidity concerns for Tennant Company.

Overall, while the current ratio points to improved short-term liquidity in 2022, the declining trend in quick ratio and cash ratio, especially in 2024, indicate a potential strain on Tennant Company's ability to meet its short-term obligations with its highly liquid assets.

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Additional liquidity measure

The cash conversion cycle of Tennant Company has shown some fluctuations over the years based on the provided data. In December 2020, the cash conversion cycle was 78.57 days, indicating that on average, it took approximately 78.57 days for the company to convert its investments in raw materials into cash receipts from sales.

By December 2021, the cash conversion cycle increased to 89.80 days, suggesting a lengthening in the time it took for Tennant Company to convert its resources into cash. This increase may be a result of various factors such as extended payment terms to suppliers or a slowdown in collecting cash from customers.

In December 2022, the cash conversion cycle further extended to 112.33 days, reaching its peak over the five-year period. This longer cycle suggests that Tennant Company may have been facing challenges in efficiently managing its inventory, accounts receivable, and accounts payable, impacting its cash conversion efficiency.

However, by December 2023, there was a slight improvement in the cash conversion cycle, decreasing to 89.69 days. This improvement may have been due to revised operational strategies or more robust cash management practices implemented by the company.

In December 2024, the cash conversion cycle remained fairly consistent at 91.06 days, indicating that Tennant Company continued to face challenges in optimizing its working capital management and converting its investments into cash flow in a timely manner.

Overall, Tennant Company's cash conversion cycle data reflects variations in its operational efficiency and working capital management practices over the years, highlighting the importance of closely monitoring these metrics to ensure sustainable financial performance.