Toro Co (TTC)
Inventory turnover
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 4,158,200 | 3,972,900 | 3,465,100 | 2,971,950 | 2,831,460 |
| Inventory | US$ in thousands | 1,087,800 | 1,051,100 | 738,170 | 652,433 | 651,663 |
| Inventory turnover | 3.82 | 3.78 | 4.69 | 4.56 | 4.34 |
October 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $4,158,200K ÷ $1,087,800K
= 3.82
The inventory turnover of Toro Co. has shown a declining trend over the past five years. In 2023, the inventory turnover ratio stood at 2.74, a decrease from 2.86 in 2022 and a notable drop from 3.55 in 2021. This downward trend is a clear indication of decreasing efficiency in managing inventory. A lower inventory turnover ratio suggests that Toro Co. takes a longer time to sell its products or might be overstocking inventory. This could lead to increased holding costs and potential obsolescence. It is advisable for the company to review its inventory management practices to improve efficiency and liquidity.