Tennant Company (TNC)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 116,900 | 77,200 | 123,100 | 140,400 | 74,100 |
| Short-term investments | US$ in thousands | — | 800 | — | — | — |
| Receivables | US$ in thousands | 247,600 | 251,500 | 211,400 | 195,400 | 216,500 |
| Total current liabilities | US$ in thousands | 273,700 | 261,600 | 290,300 | 254,300 | 274,900 |
| Quick ratio | 1.33 | 1.26 | 1.15 | 1.32 | 1.06 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($116,900K
+ $—K
+ $247,600K)
÷ $273,700K
= 1.33
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio of 1.0 or higher is generally considered healthy, as it indicates that a company has enough liquid assets to cover its current liabilities.
Over the past five years, Tennant Co.'s quick ratio has shown fluctuations. In 2023, the quick ratio improved to 1.44 from 1.41 in 2022, signaling an increase in the company's ability to cover its short-term obligations with its quick assets. This improvement could be attributed to better management of current assets and liabilities.
Compared to 2021, when the quick ratio was 1.26, the company's liquidity position has strengthened in recent years. The quick ratio was also 1.44 in 2020, showing consistency with the current year's ratio, while in 2019, the quick ratio was slightly lower at 1.20.
Overall, Tennant Co.'s quick ratio has demonstrated stability and improvement over the past five years, indicating that the company has been effectively managing its short-term liquidity position. It is important for investors and stakeholders to monitor this ratio to assess the company's ability to meet its short-term obligations in the future.
Peer comparison
Dec 31, 2023