Toll Brothers Inc (TOL)
Cash conversion cycle
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 401.30 | 434.01 | 425.36 | 417.05 | 398.34 | 380.42 | 378.15 | 381.51 | 363.60 | 411.48 | 400.09 | 394.56 | 371.88 | 406.27 | 432.34 | 432.45 | 428.27 | 458.26 | 460.76 | 454.19 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 401.30 | 434.01 | 425.36 | 417.05 | 398.34 | 380.42 | 378.15 | 381.51 | 363.60 | 411.48 | 400.09 | 394.56 | 371.88 | 406.27 | 432.34 | 432.45 | 428.27 | 458.26 | 460.76 | 454.19 |
October 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 401.30 + — – —
= 401.30
The cash conversion cycle of Toll Brothers Inc has exhibited fluctuations over the past several periods, ranging from a low of 363.60 days to a high of 460.76 days. The trend shows some variability but generally hovers around the 400 to 450 days range. The company's cash conversion cycle represents the time taken to convert raw materials into cash receipts from sales, reflecting the efficiency of its operations and management of working capital. A longer cash conversion cycle may indicate inefficiencies in inventory management, delayed collections from customers, or an extended payment period to suppliers. Conversely, a shorter cycle suggests more streamlined processes and quicker conversion of resources into cash.
Analyzing the trend in the cash conversion cycle can provide insights into Toll Brothers' liquidity and operational performance. Management should focus on optimizing inventory turnover, managing accounts receivable efficiently, and negotiating favorable payment terms with suppliers to potentially reduce the duration of the cash conversion cycle and improve overall financial health. Monitoring and continually seeking to improve this metric can enhance working capital management and strengthen the company's financial position in the long run.
Peer comparison
Oct 31, 2024