Toll Brothers Inc (TOL)

Fixed asset turnover

		Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019
Revenue	US$ in thousands	9,994,940	10,275,600	8,755,150	7,088,190	7,260,240
Property, plant and equipment	US$ in thousands	323,990	287,827	310,455	316,125	273,412
Fixed asset turnover		30.85	35.70	28.20	22.42	26.55

October 31, 2023 calculation

Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $9,994,940K ÷ $323,990K
= 30.85

The fixed asset turnover ratio measures a company's efficiency in generating sales revenue from its investment in fixed assets. Toll Brothers Inc. has shown a fluctuating trend in its fixed asset turnover over the past five years. The ratio was highest in 2022 at 35.70 and lowest in 2020 at 22.39.

A higher fixed asset turnover ratio generally indicates that the company is effectively using its fixed assets to generate sales. The declining trend in the ratio from 2022 to 2023 could suggest potential inefficiencies in utilizing fixed assets to generate revenue. Alternatively, it could signify that Toll Brothers Inc. has made significant investments in fixed assets without corresponding growth in sales.

It is important to delve further into the company's operational and investment strategies to understand the shifts in the fixed asset turnover ratio over the years. Additionally, a comparison with industry benchmarks and competitors' ratios would provide a clearer perspective on Toll Brothers Inc.'s performance in this area.