Toll Brothers Inc (TOL)

Working capital turnover

		Oct 31, 2024	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020
Revenue	US$ in thousands	10,846,700	9,994,940	10,275,600	8,755,150	7,088,190
Total current assets	US$ in thousands	1,303,040	1,300,070	1,346,750	1,638,490	1,370,940
Total current liabilities	US$ in thousands	187,905	106,036	317,411	155,559	155,202
Working capital turnover		9.73	8.37	9.98	5.90	5.83

October 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $10,846,700K ÷ ($1,303,040K – $187,905K)
= 9.73

The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales revenue. A higher ratio indicates better efficiency in managing working capital.

Toll Brothers Inc's working capital turnover has fluctuated over the past five years, ranging from 5.83 to 9.98. The ratio was highest in 2022 at 9.98, showing that the company generated $9.98 in revenue for every dollar of working capital invested. This suggests effective management of its current assets and liabilities to support sales activity.

In 2021 and 2020, the working capital turnover was lower at 5.90 and 5.83 respectively, indicating a potential inefficiency in utilizing working capital resources to generate sales during those periods.

Overall, the trend in Toll Brothers Inc's working capital turnover suggests a generally improving efficiency in recent years, with a peak in 2022. Continued monitoring and analysis of this ratio can help assess the company's ability to efficiently convert working capital into revenue.