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 | 8,790,360 | 7,077,660 |
| Total current assets | US$ in thousands | 11,570,100 | 10,776,700 | 11,148,600 | 10,628,300 | 10,318,900 |
| Total current liabilities | US$ in thousands | 2,511,320 | 2,516,800 | 2,937,460 | 2,634,360 | 2,179,970 |
| Working capital turnover | 1.20 | 1.21 | 1.25 | 1.10 | 0.87 |
October 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $10,846,700K ÷ ($11,570,100K – $2,511,320K)
= 1.20
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.
Peer comparison
Oct 31, 2024