Tennant Company (TNC)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| 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 | 1.93 | 2.30 | 2.45 | 2.67 | 2.95 |
Tennant Co.'s solvency ratios indicate its ability to meet its long-term financial obligations and the extent to which it relies on debt financing.
The debt-to-assets ratio decreased from 0.32 in 2019 to 0.18 in 2023, suggesting that the company has reduced its reliance on debt to finance its assets over the years. This indicates a stronger financial position in terms of asset coverage by equity.
The debt-to-capital ratio has also shown a declining trend from 0.48 in 2019 to 0.26 in 2023, indicating that Tennant Co. has reduced its debt financing relative to its total capital. This implies a lower level of financial risk associated with the company's capital structure.
The debt-to-equity ratio has decreased from 0.94 in 2019 to 0.35 in 2023, reflecting a significant improvement in the company's leverage position and a higher level of shareholder equity relative to debt. This indicates a stronger financial position and reduced financial risk from an equity perspective.
The financial leverage ratio, which measures the extent to which a company relies on debt financing in relation to its equity, has shown a decreasing trend from 2.95 in 2019 to 1.93 in 2023. This suggests that Tennant Co. has been able to decrease its financial leverage over the years, indicating a stronger balance sheet structure and reduced financial risk.
Overall, based on the solvency ratios, Tennant Co. has demonstrated improvements in its financial health and reduced reliance on debt financing over the years, which is favorable for its long-term sustainability and ability to meet its financial obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 10.27 | 12.28 | 11.15 | 3.36 | 4.03 |
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher ratio indicates a stronger ability to meet interest payments.
Tennant Co.'s interest coverage ratio has shown a generally positive trend over the last five years. In 2023, the interest coverage ratio was at 10.27, a slight decrease from 2022 but still at a healthy level. This ratio indicates that Tennant Co. earned 10.27 times the amount needed to cover its interest expenses in 2023.
The significant improvement in the interest coverage ratio from 2020 to 2022 suggests that Tennant Co. was able to enhance its ability to service its debt obligations during this period. However, it is worth noting that the ratio dropped in 2023 compared to the previous year.
Overall, Tennant Co. has maintained a satisfactory interest coverage ratio, which indicates a comfortable level of financial stability in meeting its interest obligations. Continued monitoring of this ratio will be essential to ensure the company's ongoing ability to handle its debt load effectively.