Toll Brothers Inc (TOL)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 6.93 | 7.12 | 8.08 | 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 |
| Quick ratio | 6.93 | 6.58 | 8.08 | 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 |
| Cash ratio | 6.93 | 6.58 | 8.08 | 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 |
Toll Brothers Inc has shown consistently strong liquidity ratios over the past few years, indicating a robust ability to meet its short-term obligations. The current ratio, which measures the company's ability to cover current liabilities with current assets, has generally been above 2, with significant fluctuations in recent quarters. The company's current ratio saw a notable increase from 4.24 in October 2022 to 11.94 in January 2024, which suggests an improved capacity to pay off its short-term debts.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also been strong and relatively stable, staying well above 1 throughout the periods analyzed. This indicates that Toll Brothers has ample liquid assets to cover its current liabilities without relying on selling inventory.
The cash ratio, which is the most conservative liquidity measure as it only considers cash and cash equivalents, has also been consistently high, exceeding 1 in all periods, with some fluctuations. The significant spike in the cash ratio in January 2023 and subsequent quarters indicates a strong cash position, which may have been driven by improved cash management or increased cash reserves.
Overall, Toll Brothers Inc's liquidity ratios demonstrate a strong financial position with ample short-term liquidity to meet its obligations. The company appears to have a well-managed balance between current assets and liabilities, which is essential for financial stability and operational flexibility.
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
The cash conversion cycle of Toll Brothers Inc has fluctuated over the past few years. The company's cash conversion cycle measures the time it takes for Toll Brothers to convert its investments in inventory and other resources into cash flows from sales.
The trend indicates that Toll Brothers' cash conversion cycle has generally been in the range of 360 to 460 days over the past two years. A higher cash conversion cycle indicates that Toll Brothers takes longer to convert its investments in inventory into cash, which may tie up capital for an extended period.
In particular, there has been an increase in the cash conversion cycle in the recent quarters compared to the previous years. This suggests that Toll Brothers may be facing challenges in efficiently managing its inventory, collecting receivables, or paying its payables.
Overall, Toll Brothers Inc should focus on optimizing its inventory management, sales process, and working capital management to reduce the cash conversion cycle and improve its cash flow efficiency.