Toll Brothers Inc (TOL)

Cash conversion cycle

		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	Oct 31, 2019	Jul 31, 2019	Apr 30, 2019
Days of inventory on hand (DOH)	days	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	439.18	442.94	424.53
Days of sales outstanding (DSO)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Cash conversion cycle	days	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	439.18	442.94	424.53

January 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 417.05 + — – —
= 417.05

The cash conversion cycle (CCC) for Toll Brothers Inc. has shown some fluctuations over the past eight quarters, ranging from a low of 390.43 days in Q4 2022 to a high of 454.62 days in Q3 2022. The cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.

Despite some variations, the CCC has generally been on the higher side, indicating that Toll Brothers Inc. may be taking longer to turn its investments in inventory and other operating resources into cash receipts from sales. This could potentially signify inefficiencies in managing inventory, accounts receivable, and accounts payable.

Overall, it would be advisable for Toll Brothers Inc. to focus on streamlining its operations to shorten its cash conversion cycle, which would help enhance its liquidity position and potentially improve its overall financial performance.