Tennant Company (TNC)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 113,900 | 137,300 | 87,600 | 83,900 | 63,700 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 42,100 | 577,000 | 470,800 | 433,800 | 404,800 |
| Return on total capital | 270.55% | 23.80% | 18.61% | 19.34% | 15.74% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $113,900K ÷ ($—K + $42,100K)
= 270.55%
Tennant Company's return on total capital has shown consistent growth over the years, reflecting a positive trend in the company's ability to generate returns from its invested capital.
The return on total capital increased from 15.74% as of December 31, 2020, to 19.34% by December 31, 2021, showcasing an improvement in capital efficiency.
In the subsequent years, the return on total capital remained relatively stable, with a slight decline to 18.61% by December 31, 2022, before rebounding to 23.80% by December 31, 2023.
The most notable observation is the significant spike in the return on total capital to 270.55% by December 31, 2024. This extraordinary increase may be an anomaly or could be attributed to specific events such as asset sales, debt restructuring, or other extraordinary items.
Overall, Tennant Company's consistent improvement in return on total capital signals the company's enhanced efficiency in utilizing its capital base to generate profits, although the extreme value for 2024 warrants further investigation to ensure its sustainability.
Peer comparison
Dec 31, 2024