Toro Co (TTC)
Number of days of payables
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Payables turnover | 9.67 | 6.87 | 6.89 | 8.17 | 8.87 | |
| Number of days of payables | days | 37.74 | 53.17 | 53.00 | 44.70 | 41.15 |
October 31, 2023 calculation
Number of days of payables = 365 ÷ Payables turnover
= 365 ÷ 9.67
= 37.74
The number of days of payables for Toro Co. is an important metric that reflects the average number of days it takes for the company to pay its suppliers or trade payables. A lower number of days indicates that the company tends to pay its suppliers more quickly, whereas a higher number of days suggests that the company takes longer to settle its payables.
Looking at the trend in Toro Co.'s number of days of payables from 2019 to 2023, we observe the following:
In 2019, the number of days of payables was 55.75 days.
In 2020, it increased to 60.69 days.
In 2021, there was a further increase to 70.06 days.
In 2022, the number of days of payables was 70.16 days, indicating a slight increase from the previous year.
In 2023, the number of days of payables decreased to 52.75 days.
The trend in Toro Co.'s number of days of payables indicates some variability, with an increase from 2019 to 2021, followed by a decline in 2023. This variability suggests fluctuations in the company's payment practices and the management of its payables.
A decrease in the number of days of payables, as seen in 2023, may indicate improved efficiency in managing payables, as the company is taking fewer days to settle its obligations to suppliers. This could be a positive sign, demonstrating effective working capital management and potentially stronger supplier relationships.
On the other hand, the increase in the number of days of payables from 2019 to 2021 may indicate that Toro Co. took longer to pay its suppliers during this period. This could have been a deliberate strategy to optimize cash flow or negotiate more favorable payment terms with suppliers, but it may also raise questions about the company's ability to maintain strong supplier relationships.
Overall, while the decrease in the number of days of payables in 2023 is a positive development, further analysis of the reasons behind the fluctuating trend and its impact on the company's working capital management and supplier relations would provide deeper insights into Toro Co.'s financial performance.