Tennant Company (TNC)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 28.27 | 1.93 | 2.30 | 2.45 | 2.67 |
Tennant Company's solvency ratios indicate a strong financial position with consistently low debt levels relative to its assets, capital, and equity over the years 2020 to 2024. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio all stand at 0.00 for each of the years, suggesting that the company operates with minimal reliance on debt to finance its operations and investments.
On the other hand, the Financial leverage ratio shows some fluctuation, starting at 2.67 in 2020 and gradually decreasing to 1.93 in 2023 before significantly jumping to 28.27 in 2024. This sudden increase in the financial leverage ratio in 2024 may raise concerns about the company's increased reliance on debt to support its operations or growth initiatives. It would be essential for stakeholders to further investigate the reasons behind this sharp rise in leverage.
Overall, Tennant Company's solvency ratios paint a picture of a stable and financially sound company with prudent debt management practices, although the sudden spike in the financial leverage ratio in 2024 warrants attention and could potentially impact the company's financial risk profile.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 12.52 | 10.17 | 12.34 | 11.49 | 3.08 |
Tennant Company's interest coverage ratio has shown an improving trend over the past five years, indicating the company's ability to meet its interest obligations from its operating earnings.
In December 2020, the interest coverage ratio was 3.08, reflecting that Tennant's operating income was able to cover its interest expenses roughly three times. By the end of December 2021, the ratio had significantly increased to 11.49, indicating a substantial improvement in Tennant's ability to meet interest payments.
This positive trend in interest coverage continued in the subsequent years, with ratios of 12.34, 10.17, and 12.52 for the years ending December 31, 2022, 2023, and 2024, respectively. These figures suggest that Tennant Company's operating earnings are robust enough to comfortably cover its interest costs, indicating a strong financial position and reduced risk of default on debt obligations.
Overall, the consistent increase in Tennant Company's interest coverage ratio reflects a healthy financial performance and a sound ability to service its debt obligations through its operating profits.