Toll Brothers Inc (TOL)

Financial leverage ratio

		Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019
Total assets	US$ in thousands	12,527,000	12,288,700	11,537,800	11,065,700	10,828,100
Total stockholders’ equity	US$ in thousands	6,797,160	6,006,090	5,295,020	4,875,240	5,071,820
Financial leverage ratio		1.84	2.05	2.18	2.27	2.13

October 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $12,527,000K ÷ $6,797,160K
= 1.84

The financial leverage ratio of Toll Brothers Inc. has shown a declining trend over the past five years. The ratio decreased from 2.13 in 2019 to 1.84 in 2023. This trend indicates that the company has reduced its reliance on debt financing relative to equity, which may be seen as a positive sign of financial stability. A lower financial leverage ratio suggests that the company has a lower level of financial risk and may be better positioned to weather economic downturns. However, it's important to consider the specific industry and business circumstances when interpreting this trend, as certain industries may naturally operate with higher or lower leverage ratios.