Toro Co (TTC)
Fixed asset turnover
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 4,494,500 | 4,478,920 | 3,930,920 | 3,347,690 | 3,110,320 |
| Property, plant and equipment | US$ in thousands | 641,700 | 571,700 | 487,731 | 467,919 | 437,317 |
| Fixed asset turnover | 7.00 | 7.83 | 8.06 | 7.15 | 7.11 |
October 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $4,494,500K ÷ $641,700K
= 7.00
The fixed asset turnover ratio measures a company's ability to generate sales from its investment in fixed assets, such as property, plant, and equipment. A higher fixed asset turnover ratio generally indicates better utilization of fixed assets to generate sales.
From the provided data, we can see that Toro Co.'s fixed asset turnover has fluctuated over the past five years. In 2023, the fixed asset turnover was 7.10, a decrease from the previous year's ratio of 7.90. This decline may suggest a decrease in the efficiency of utilizing fixed assets to generate sales.
However, it's important to note that the fixed asset turnover ratio may be influenced by various factors such as changes in sales, investments in fixed assets, or changes in depreciation methods. Therefore, a thorough analysis of the company's financial and operational performance is necessary to better understand the movement in the fixed asset turnover ratio.
Overall, while the trend in Toro Co.'s fixed asset turnover has shown some fluctuations, further analysis of the company's financial statements and business operations is required to assess the implications of these changes and make informed conclusions about the company's efficiency in utilizing its fixed assets to generate sales.