Toll Brothers Inc (TOL)

Working capital 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
Total current assets	US$ in thousands	1,300,070	1,346,750	1,638,490	1,370,940	1,286,010
Total current liabilities	US$ in thousands	106,036	317,411	155,559	155,202	157,897
Working capital turnover		8.37	9.98	5.90	5.83	6.44

October 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $9,994,940K ÷ ($1,300,070K – $106,036K)
= 8.37

The working capital turnover for Toll Brothers Inc. has fluctuated over the past five years, as evidenced by the following figures:

- Oct 31, 2023: 1.47
- Oct 31, 2022: 1.59
- Oct 31, 2021: 1.37
- Oct 31, 2020: 1.12
- Oct 31, 2019: 1.05

The working capital turnover ratio measures the efficiency of a company in managing its working capital. A higher ratio indicates that the company is generating more revenue per unit of working capital. The decreasing trend from 2019 to 2020, followed by an increase in 2021 and a subsequent decrease in 2022, suggests some variability in the company's ability to generate sales relative to its working capital.

While the trend is not consistent, it is notable that the ratio has generally been above 1, indicating that Toll Brothers Inc. has been generating more than a dollar of revenue for each dollar of working capital over the period in consideration. However, a more in-depth analysis of the company's operational and financial performance would be needed to fully understand the reasons behind the observed fluctuations in the working capital turnover ratio.