Toll Brothers Inc (TOL)
Cash conversion cycle
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 396.42 | 363.32 | 371.88 | 428.27 | 439.19 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 396.42 | 363.32 | 371.88 | 428.27 | 439.19 |
October 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 396.42 + — – —
= 396.42
The cash conversion cycle of Toll Brothers Inc. has fluctuated over the past five years, indicating changes in the company's efficiency in managing its operating cash flows.
In 2023, the cash conversion cycle stood at 428.51 days, representing the average number of days it takes for the company to convert its resources into cash. This was an increase from the previous year, when the cycle was 390.43 days. The longer cycle in 2023 suggests a potential slowdown in Toll Brothers' ability to convert its investments in inventory and receivables into cash.
Comparing the 2023 figure to that of 2021 and 2022, it is observed that there was a slight improvement in efficiency, as the cash conversion cycle was 417.02 days and 390.43 days, respectively. However, the cycle was notably shorter in 2021 than in 2020 and 2019, when it stood at 417.02 days and 504.42 days, respectively, indicating a positive trend in the company's cash conversion efficiency during those years.
Overall, the analysis suggests that Toll Brothers Inc. experienced fluctuating efficiency in managing its cash conversion cycle over the past five years, with the cycle lengthening in 2023 compared to the previous year. This indicates that the company may have experienced challenges in efficiently converting its investments into cash during the most recent reporting period.
Peer comparison
Oct 31, 2023