Toro Co (TTC)
Activity ratios
Short-term
Turnover ratios
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.93 | 3.82 | 3.78 | 4.69 | 4.56 |
| Receivables turnover | 9.97 | 11.03 | 13.46 | 12.67 | 12.82 |
| Payables turnover | 9.02 | 9.67 | 6.87 | 6.89 | 8.17 |
| Working capital turnover | 5.81 | 5.29 | 7.32 | 7.12 | 5.85 |
The activity ratios of Toro Co indicate how efficiently the company manages its various operational aspects.
- Inventory turnover has been relatively stable over the five-year period, ranging from 3.78 to 4.69. This metric shows how effectively Toro Co is managing its inventory levels and converting inventory into sales. A higher turnover ratio indicates that inventory is selling more quickly, which can positively impact cash flow and profitability.
- Receivables turnover has shown some fluctuation but generally remains at a healthy level, ranging from 9.97 to 13.46. This ratio reflects how quickly the company collects outstanding receivables from its customers. A higher turnover ratio suggests that Toro Co is efficient in collecting payments from customers, which enhances liquidity and reduces bad debt risk.
- Payables turnover has varied over the years, indicating changes in the company's payment practices. The ratio ranges from 6.87 to 9.67, showing how well Toro Co manages its trade payables. A higher turnover ratio implies that the company is paying its suppliers more quickly, which can strengthen relationships and potentially negotiate better terms.
- Working capital turnover has also shown some variability, ranging from 5.29 to 7.32. This ratio measures how effectively Toro Co is utilizing its working capital to generate sales. A higher turnover indicates that the company is efficiently deploying its resources to support sales growth and operational activities.
Overall, Toro Co's activity ratios suggest that the company is effectively managing its inventory, receivables, payables, and working capital to support its operations and drive financial performance.
Average number of days
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 92.83 | 95.49 | 96.57 | 77.76 | 80.13 |
| Days of sales outstanding (DSO) | days | 36.61 | 33.09 | 27.11 | 28.81 | 28.47 |
| Number of days of payables | days | 40.45 | 37.74 | 53.17 | 53.00 | 44.70 |
The Days of Inventory on Hand (DOH) for Toro Co has shown a slight improvement over the past five years, decreasing from 95.49 days in 2023 to 92.83 days in 2024. This indicates that the company was able to manage its inventory more efficiently in 2024 compared to previous years.
The Days of Sales Outstanding (DSO) have fluctuated over the same period, reaching a peak of 36.61 days in 2024, compared to a low of 27.11 days in 2022. This could suggest variations in the company's collection efforts or the payment behavior of its customers.
The Number of Days of Payables has also shown variability, with an increase from 37.74 days in 2023 to 40.45 days in 2024. This suggests that Toro Co took slightly longer to pay its suppliers in 2024 compared to the previous year.
Overall, the efficiency of inventory management has improved slightly, while the collection period increased in 2024. Additionally, the company slightly extended its payment period to suppliers. These changes in activity ratios may have implications for Toro Co's working capital management and overall financial performance.
Long-term
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 7.11 | 7.00 | 7.83 | 8.06 | 7.15 |
| Total asset turnover | 1.28 | 1.23 | 1.26 | 1.34 | 1.17 |
Toro Co's long-term activity ratios show the efficiency of the company in utilizing its fixed assets and total assets to generate sales revenue over the past five years.
The fixed asset turnover ratio has been relatively stable, ranging from 7.00 to 8.06, with an average of 7.43. This indicates that the company is effectively using its fixed assets to generate sales. A higher fixed asset turnover ratio generally suggests better asset utilization and efficiency in generating revenue from investments in property, plant, and equipment.
On the other hand, the total asset turnover ratio has fluctuated between 1.17 and 1.34, with an average of 1.26. This ratio reflects how efficiently Toro Co is using all its assets (both fixed and current) to generate sales. A higher total asset turnover ratio signifies that the company is efficient in generating revenue relative to the total assets it holds.
Overall, both ratios indicate that Toro Co has been efficient in utilizing its assets to generate sales revenue over the past five years, with the company achieving a high level of turnover compared to its asset base. The stability in the fixed asset turnover ratio suggests consistent performance in generating revenue from fixed assets, while the fluctuation in the total asset turnover ratio may be influenced by changes in the company's asset composition or sales volume.