Toll Brothers Inc (TOL)
Profitability ratios
Return on sales
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 16.56% | 14.62% | 11.26% | 7.91% | 9.88% |
| Operating profit margin | 17.26% | 14.68% | 11.66% | 7.76% | 9.38% |
| Pretax margin | 18.43% | 16.58% | 12.57% | 8.28% | 10.84% |
| Net profit margin | 13.73% | 12.52% | 9.52% | 6.30% | 8.13% |
Toll Brothers Inc.'s profitability ratios indicate a positive trend over the past five years. The gross profit margin has improved gradually from 19.59% in 2019 to 26.36% in 2023. This demonstrates the company's ability to efficiently control production costs and generate profits from its operations.
Similarly, the operating profit margin has shown consistent growth, increasing from 9.42% in 2019 to 17.26% in 2023. This suggests that the company has effectively managed its operating expenses and increased its operating income over the years.
The pretax margin also reflects a favorable trend, rising from 8.29% in 2020 to 18.43% in 2023. This indicates that the company has been able to generate higher profits before accounting for taxes, signaling improved financial performance.
Furthermore, the net profit margin has exhibited steady improvement, climbing from 8.17% in 2019 to 13.73% in 2023. This reflects the company's ability to effectively manage its expenses, taxes, and interest payments to increase its net income.
In summary, the profitability ratios of Toll Brothers Inc. demonstrate a consistent and favorable upward trajectory, indicating improved efficiency in cost management, increased operational profitability, and enhanced overall profitability over the five-year period.
Return on investment
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 13.77% | 12.28% | 8.85% | 4.97% | 6.29% |
| Return on assets (ROA) | 10.95% | 10.47% | 7.23% | 4.04% | 5.45% |
| Return on total capital | 25.37% | 25.12% | 19.28% | 11.29% | 15.52% |
| Return on equity (ROE) | 20.19% | 21.42% | 15.74% | 9.16% | 11.63% |
To analyze Toll Brothers Inc.'s profitability ratios, we can consider several key metrics.
First, the operating return on assets (Operating ROA) measures the company's ability to generate operating income from its assets. The ratio has shown a healthy increase from 6.29% in 2019 to 13.77% in 2023, indicating improved operational efficiency and profitability.
Next, the return on assets (ROA) provides an overall measure of profitability by assessing the company's ability to generate earnings from its total assets. The ROA has generally increased from 5.45% in 2019 to 10.95% in 2023, suggesting improved asset utilization and profitability.
Furthermore, the return on total capital reflects the efficiency of utilizing all of the company's capital to generate profits. This ratio has notably increased from 7.85% in 2019 to 18.38% in 2023, indicating effective capital deployment and enhanced overall profitability.
Lastly, the return on equity (ROE) gauges the company's ability to generate profits from shareholders' equity. Although there was a slight fluctuation in the ROE over the years, the ratio has generally showcased a positive trend, rising from 11.63% in 2019 to 20.19% in 2023.
Overall, the profitability ratios demonstrate a consistent improvement in Toll Brothers Inc.'s ability to generate profits from its assets, capital, and equity, indicating enhanced efficiency and financial performance over the years.