Tennant Company (TNC)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 59.12 | 75.59 | 58.69 | 49.89 | 81.06 |
| Days of sales outstanding (DSO) | days | 72.65 | 83.86 | 71.36 | 73.15 | 69.46 |
| Number of days of payables | days | 37.44 | 46.14 | 44.40 | 41.53 | 50.82 |
| Cash conversion cycle | days | 94.33 | 113.31 | 85.65 | 81.51 | 99.71 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 59.12 + 72.65 – 37.44
= 94.33
The cash conversion cycle of Tennant Co. has fluctuated over the past five years. In 2023, the company's cash conversion cycle stood at 105.56 days, showing an improvement from the previous year (127.82 days). This indicates that the company was able to manage its cash flow more effectively in 2023 compared to 2022.
Looking back further, the cash conversion cycle was 92.60 days in 2021 and 86.06 days in 2020, reflecting efficient cash management practices during those years. However, there was a slight increase in the cash conversion cycle in 2019, with a value of 101.89 days.
Overall, Tennant Co.'s cash conversion cycle has shown some variability in recent years, but the company has generally been successful in efficiently converting its investments in inventory and receivables into cash. It is important for Tennant Co. to continue monitoring and managing its cash conversion cycle effectively to maintain healthy liquidity and working capital levels.
Peer comparison
Dec 31, 2023