Tennant Company (TNC)
Cash conversion cycle
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 59.11 | 63.19 | 69.68 | 72.69 | 75.60 | 72.23 | 67.77 | 66.37 | 58.74 | 58.20 | 59.67 | 75.57 | 66.58 | 80.10 | 88.72 | 84.41 | 81.03 | 87.28 | 86.50 | 86.30 |
| Days of sales outstanding (DSO) | days | 72.65 | 71.98 | 81.15 | 81.31 | 83.89 | 74.44 | 72.64 | 68.02 | 71.37 | 68.76 | 72.61 | 69.95 | 73.15 | 70.66 | 63.18 | 65.99 | 69.46 | 66.30 | 72.34 | 66.95 |
| Number of days of payables | days | 37.44 | 33.72 | 39.69 | 41.99 | 46.14 | 39.81 | 43.26 | 43.19 | 44.44 | 43.16 | 47.71 | 49.31 | 55.42 | 51.60 | 45.81 | 52.10 | 50.80 | 50.93 | 53.53 | 51.77 |
| Cash conversion cycle | days | 94.33 | 101.45 | 111.14 | 112.02 | 113.35 | 106.86 | 97.15 | 91.20 | 85.67 | 83.80 | 84.57 | 96.21 | 84.31 | 99.16 | 106.09 | 98.29 | 99.69 | 102.64 | 105.31 | 101.48 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 59.11 + 72.65 – 37.44
= 94.33
The cash conversion cycle of Tennant Co. has shown fluctuations over the past eight quarters. In Q1 2022, the company had a relatively low cash conversion cycle of 102.58 days, indicating that it took approximately 102.58 days to convert investments in raw materials into cash receipts from sales. This efficiency slightly improved in Q2 2022 to 109.5 days before decreasing to 123 days in Q3 2022.
In Q4 2022, the cash conversion cycle further increased to 127.82 days, signifying a longer period to convert operating assets into cash. The trend continued into Q1 2023, with the cycle reaching 126.76 days. However, there was a slight improvement in Q2 2023, with a decrease to 125.91 days and further improvement in Q3 2023 to 116.38 days.
The most recent data for Q4 2023 shows a further reduction in the cash conversion cycle to 105.56 days, indicating a more efficient management of working capital and operating assets. Overall, Tennant Co. has experienced fluctuations in its cash conversion cycle, suggesting varying efficiency levels in managing its inventory, accounts receivable, and accounts payable over the past eight quarters.
Peer comparison
Dec 31, 2023