Toll Brothers Inc (TOL)
Solvency ratios
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.74 | 1.84 | 2.05 | 2.18 | 2.27 |
The solvency ratios of Toll Brothers Inc indicate a consistently low level of debt relative to its assets, capital, and equity over the past five years, as evidenced by a debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio of 0.00 for each year. This suggests that the company has minimal reliance on debt to finance its operations and investments, which can be viewed positively as it lowers the risk of financial distress.
However, the financial leverage ratio has varied over the same period, ranging from 1.74 in 2024 to 2.27 in 2020. This ratio measures the extent to which a company relies on debt financing compared to equity, with higher values indicating higher financial risk. Despite the fluctuations, the financial leverage ratio has generally trended upwards, indicating an increasing level of financial risk associated with debt as a source of capital.
In conclusion, while Toll Brothers Inc maintains a conservative approach towards debt management with very low debt ratios, the increasing financial leverage ratio implies a rising reliance on debt over equity in recent years, which could potentially elevate the company's financial risk profile.
Coverage ratios
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | — | — | 10.68 | 8.47 | 225.52 |
The interest coverage ratio for Toll Brothers Inc has shown a fluctuating trend over the past five years, with significant variations in values. In 2020, the interest coverage ratio spiked to an exceptionally high level of 225.52, reflecting a strong ability to cover interest expenses with operating income. However, in the following years, the ratio decreased substantially to 8.47 in 2021 and further to 10.68 in 2022, indicating a decline in the company's ability to cover interest payments.
It is important to note that the absence of data for 2023 and 2024 makes it challenging to assess the company's recent financial performance in terms of interest coverage. This fluctuation in the interest coverage ratio indicates potential shifts in the company's profitability and financial health, which should be further explored in the context of Toll Brothers Inc's overall financial situation and industry dynamics.