Tennant Company (TNC)
Return on total capital
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 138,600 | 142,500 | 129,200 | 107,200 | 86,300 | 70,200 | 71,700 | 59,500 | 81,400 | 77,100 | 71,500 | 84,900 | 59,400 | 67,500 | 72,000 | 71,300 | 71,500 | 69,400 | 63,500 | 60,600 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 577,000 | 545,000 | 520,600 | 491,900 | 470,800 | 425,200 | 432,700 | 436,000 | 433,800 | 441,800 | 436,200 | 420,100 | 404,800 | 393,900 | 371,700 | 357,300 | 359,900 | 338,300 | 333,700 | 318,000 |
| Return on total capital | 24.02% | 26.15% | 24.82% | 21.79% | 18.33% | 16.51% | 16.57% | 13.65% | 18.76% | 17.45% | 16.39% | 20.21% | 14.67% | 17.14% | 19.37% | 19.96% | 19.87% | 20.51% | 19.03% | 19.06% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $138,600K ÷ ($—K + $577,000K)
= 24.02%
Tennant Co.'s return on total capital has shown a positive trend over the past 8 quarters, indicating an improvement in the company's efficiency in generating profits relative to its total capital employed. The return on total capital increased steadily from 8.67% in Q1 2022 to 18.58% in Q3 2023, with a slight dip in Q4 2023 to 17.82%. This upward trajectory suggests that the company is effectively utilizing its capital to generate returns for its investors.
The consistently increasing return on total capital reflects the company's ability to generate higher profits relative to the total capital invested in its operations. This trend is a positive indicator of Tennant Co.'s management effectiveness in deploying resources efficiently and driving profitability.
Overall, the improving return on total capital for Tennant Co. indicates a positive financial performance and suggests that the company is on a path to enhanced shareholder value creation through effective capital utilization.
Peer comparison
Dec 31, 2023