Toro Co (TTC)
Days of sales outstanding (DSO)
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 9.97 | 11.03 | 13.46 | 12.67 | 12.82 | |
| DSO | days | 36.61 | 33.09 | 27.11 | 28.81 | 28.47 |
October 31, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 9.97
= 36.61
To analyze Toro Co's Days of Sales Outstanding (DSO) over the past five years, we can observe a trend of fluctuation in the number of days it takes the company to collect its accounts receivable.
In 2020, the DSO was 28.47 days, which increased slightly to 28.81 days in 2021. However, there was a significant jump in 2022, with the DSO rising to 27.11 days. This increase was followed by a further increase in 2023 to 33.09 days before decreasing to 36.61 days in 2024.
The fluctuations in Toro Co's DSO indicate changes in the company's efficiency in collecting outstanding receivables. A lower DSO suggests that the company is collecting payments more quickly, which can improve cash flow and liquidity. On the other hand, a higher DSO may indicate issues with collecting payments promptly, potentially leading to increased credit risk and impacting the company's working capital.
Overall, Toro Co's DSO trend suggests that the company experienced some challenges in collecting accounts receivable efficiently in recent years, as evidenced by the upward trend in DSO until 2024. Further analysis of the underlying reasons for these fluctuations would be necessary to understand the factors driving these changes and their potential impact on the company's financial performance.