Toll Brothers Inc (TOL)

Current ratio

		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
Total current assets	US$ in thousands	754,793	1,300,070	1,033,370	761,945	791,609	1,346,750	316,471	535,038	671,365	1,638,490	946,097	714,968	949,696	1,370,940	559,348	741,222	519,793	1,286,010	836,258	924,448
Total current liabilities	US$ in thousands	63,194	106,036	70,517	102,489	71,187	317,411	113,705	113,688	101,615	155,559	148,655	146,932	112,619	155,202	122,189	106,018	97,653	157,897	150,000	110,012
Current ratio		11.94	12.26	14.65	7.43	11.12	4.24	2.78	4.71	6.61	10.53	6.36	4.87	8.43	8.83	4.58	6.99	5.32	8.14	5.58	8.40

January 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $754,793K ÷ $63,194K
= 11.94

The current ratio of Toll Brothers Inc. has fluctuated over the past eight quarters based on the provided data. In Q1 2024, the current ratio improved to 4.11, indicating that the company had $4.11 in current assets for every $1 in current liabilities. This was a significant increase from the previous quarter (Q4 2023) where the current ratio was 2.75.

The trend in the current ratio over the past two years shows some variability, with ratios ranging from 2.63 to 4.11. Generally, a current ratio above 1 indicates that a company has more current assets than current liabilities, which is considered favorable for liquidity and financial stability.

The current ratio reached its lowest point in Q4 2022 at 2.63, suggesting potential liquidity challenges during that quarter. However, the company managed to improve its liquidity position in subsequent quarters.

Overall, it is important for Toll Brothers Inc. to maintain a current ratio above 1 to meet its short-term obligations and ensure financial health. The recent increase in the current ratio to 4.11 in Q1 2024 reflects a strong liquidity position, but it is essential for the company to monitor and manage its current assets and liabilities effectively to sustain this favorable ratio in the future.