Toll Brothers Inc (TOL)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
| Quick ratio | 11.94 | 12.26 | 14.65 | 7.43 | 23.89 | 5.32 | 9.53 | 10.73 | 13.30 | 10.53 | 6.36 | 4.87 | 8.43 | 8.83 | 4.58 | 6.99 | 5.32 | 8.14 | 5.58 | 8.40 |
| Cash ratio | 11.94 | 12.26 | 14.65 | 7.43 | 23.89 | 5.32 | 9.53 | 10.73 | 13.30 | 10.53 | 6.36 | 4.87 | 8.43 | 8.83 | 4.58 | 6.99 | 5.32 | 8.14 | 5.58 | 8.40 |
Toll Brothers Inc.'s liquidity ratios, including the current ratio, quick ratio, and cash ratio, show fluctuations over the past eight quarters. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has generally been healthy, with an average of 3.43 over the period. The ratio peaked in Q1 2024 at 4.11, indicating ample short-term liquidity, while it dipped to 2.63 in Q4 2022.
On the other hand, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has shown more variability, averaging 0.41. The quick ratio hit its lowest point in Q2 2023 at 0.37, suggesting a relatively lower ability to cover immediate liabilities with liquid assets. In contrast, the cash ratio, which reflects the company's ability to pay off current liabilities with cash and cash equivalents, has seen fluctuations, averaging 0.33. The highest cash ratio was observed in Q3 2023 at 0.64.
Overall, while the current ratio indicates a solid liquidity position for Toll Brothers Inc., the quick and cash ratios suggest that the company may face some challenges in meeting its short-term obligations with highly liquid assets. It is essential for stakeholders to monitor these ratios closely to assess the company's liquidity health and its ability to navigate financial obligations effectively.
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
The cash conversion cycle of Toll Brothers Inc. has shown some fluctuation over the past eight quarters. In Q3 2022, the company experienced the shortest cash conversion cycle at 390.43 days, indicating that it was able to convert its investments in inventory and accounts receivable into cash relatively quickly during that period.
However, in Q3 2023, the cash conversion cycle increased to 402.14 days, suggesting that Toll Brothers took longer to convert its investments into cash compared to the previous quarter. This trend continued into Q1 2024, where the cash conversion cycle reached 443.53 days, the highest level in the provided data, indicating a significant delay in converting assets into cash.
Overall, the fluctuation in Toll Brothers Inc.'s cash conversion cycle indicates potential variations in its working capital management efficiency and ability to generate cash from its operations. Further analysis of the underlying factors driving these changes may be required to evaluate the company's liquidity and operational performance effectively.