Tennant Company (TNC)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 109,500 | 66,300 | 64,900 | 33,700 | 45,800 |
| Total stockholders’ equity | US$ in thousands | 577,000 | 470,800 | 433,800 | 404,800 | 359,900 |
| ROE | 18.98% | 14.08% | 14.96% | 8.33% | 12.73% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $109,500K ÷ $577,000K
= 18.98%
Tennant Co.'s return on equity (ROE) has shown variability over the past five years, ranging from 8.33% in 2020 to 18.98% in 2023. The ROE indicates how efficiently the company is utilizing its shareholders' equity to generate profits. An upward trend in ROE generally signifies improved profitability and effective management of shareholder investments.
The ROE of 18.98% in 2023 indicates that the company generated approximately $0.19 in net income for every $1 of shareholders' equity. This suggests that Tennant Co. has been increasingly efficient in converting equity into profits.
In contrast, the ROE of 8.33% in 2020 implies that the company was less effective in generating profits relative to the equity invested. The subsequent improvement in ROE in the following years indicates progression in operational efficiency and profitability.
Overall, Tennant Co.'s ROE performance has shown positive momentum, with the latest figure reflecting strong profitability relative to shareholders' equity. However, it is essential to monitor this ratio over time to assess the company's consistency in delivering shareholder value.
Peer comparison
Dec 31, 2023