Toll Brothers Inc (TOL)

Inventory turnover

		Oct 31, 2024	Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020
Cost of revenue (ttm)	US$ in thousands	8,834,340	8,576,540	8,518,320	8,385,620	8,299,580	8,830,560	8,791,160	8,705,780	8,766,930	8,345,740	8,191,360	7,941,230	7,769,490	7,450,870	6,973,960	6,687,730	6,527,400	6,399,400	6,492,260	6,588,380
Inventory	US$ in thousands	9,712,920	10,198,100	9,926,940	9,581,480	9,057,580	9,203,520	9,107,880	9,099,480	8,733,330	9,408,520	8,978,820	8,584,430	7,915,880	8,293,280	8,260,660	7,923,640	7,658,910	8,034,520	8,195,630	8,198,350
Inventory turnover		0.91	0.84	0.86	0.88	0.92	0.96	0.97	0.96	1.00	0.89	0.91	0.93	0.98	0.90	0.84	0.84	0.85	0.80	0.79	0.80

October 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $8,834,340K ÷ $9,712,920K
= 0.91

Inventory turnover measures how efficiently a company is managing its inventory by showing how many times during a period the inventory is sold and replaced. Looking at Toll Brothers Inc's inventory turnover over the past few quarters, we can see a declining trend. The inventory turnover ratio has fluctuated between 0.79 to 1.00 over the past two years.

A lower inventory turnover ratio may indicate that Toll Brothers Inc is carrying too much inventory relative to its sales level, potentially leading to higher carrying costs, obsolescence risk, or markdowns. A high inventory turnover ratio indicates that the company is efficiently selling its inventory and quickly replenishing it.

In the latest quarter ending October 31, 2024, Toll Brothers Inc's inventory turnover was 0.91, which suggests that the company is turning over its inventory approximately 0.91 times during the period. This implies that the company may have some room for improvement in managing its inventory more efficiently. It would be beneficial for the company to monitor its inventory levels closely and adjust procurement and sales strategies to optimize inventory turnover in the future.