Tennant Company (TNC)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Current ratio 1.97 2.17 2.17 2.15 2.08 2.27 2.29 2.27 2.20 2.14 1.97 1.97 1.81 1.91 1.84 1.91 1.94 2.01 1.83 2.60
Quick ratio 0.34 0.33 0.32 0.35 0.43 0.40 0.38 0.36 0.30 0.24 0.28 0.41 0.43 0.51 0.48 0.63 0.55 0.51 0.39 0.85
Cash ratio 0.34 0.33 0.32 0.35 0.43 0.40 0.38 0.36 0.30 0.24 0.28 0.41 0.43 0.51 0.48 0.63 0.55 0.51 0.39 0.85

The current ratio of Tennant Company has shown fluctuations over the past few years, ranging between 1.81 and 2.29. This indicates the company's ability to meet its short-term obligations with its current assets, with higher values generally considered more favorable for creditors and investors.

On the other hand, the quick ratio has displayed a wider range, from 0.24 to 0.63, reflecting the company's ability to cover its immediate liabilities with its most liquid assets. The lower values suggest a potential liquidity risk, especially when compared to the current ratio.

The cash ratio, which measures the company's capacity to cover its current liabilities with cash and cash equivalents, has also varied significantly, ranging from 0.24 to 0.63. This ratio provides insight into the company's ability to handle its short-term obligations without relying on sales of inventory or receivables.

Overall, while the current ratio shows a more stable liquidity position for Tennant Company, the quick ratio and cash ratio indicate potential challenges in quickly meeting short-term liabilities. Investors and creditors may want to closely monitor these ratios to assess the company's liquidity risk.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cash conversion cycle days 91.06 101.68 96.83 93.39 89.69 94.77 103.38 107.33 112.33 108.53 102.45 101.67 89.80 90.54 85.52 84.82 79.04 80.58 89.07 84.57

The cash conversion cycle for Tennant Company has shown fluctuations over the period from March 31, 2020, to December 31, 2024. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

The trend in Tennant Company's cash conversion cycle shows variability, indicating potential changes in its working capital management efficiency. The cycle ranged from a low of 79.04 days on December 31, 2020, to a high of 112.33 days on December 31, 2022. This variability suggests fluctuations in inventory turnover, accounts receivable collection, and accounts payable management.

Overall, Tennant Company experienced an increase in the cash conversion cycle from 84.57 days on March 31, 2020, to 91.06 days on December 31, 2024. This increase may indicate potential challenges in managing working capital effectively or could be related to changes in the company's operating environment, sales trends, or supplier/customer relationships.

Further analysis of the components contributing to the cash conversion cycle, such as inventory turnover, accounts receivable days, and accounts payable days, would provide insights into the specific areas where Tennant Company may need to focus on improving its working capital management efficiency. Evaluating these trends over time can help the company identify opportunities for operational enhancements and strategic adjustments to optimize its cash conversion cycle and overall financial performance.