Toro Co (TTC)

Short-term

Turnover ratios

Activity ratios provide insights into how efficiently a company manages its assets and liabilities to generate sales.

1. Inventory turnover: Toro Co's inventory turnover has ranged between 3.45 and 5.08 over the past two years, indicating that the company is effectively managing its inventory levels. A higher turnover suggests that Toro Co is selling its products quickly, which can lead to better cash flow and lower storage costs.

2. Receivables turnover: The receivables turnover for Toro Co has fluctuated between 6.99 and 13.46 over the same period, reflecting the company's ability to collect outstanding payments from customers. A higher turnover indicates that Toro Co is efficient in collecting its accounts receivable, leading to improved liquidity and reduced credit risk.

3. Payables turnover: Toro Co's payables turnover has varied between 6.51 and 10.85, showing the company's efficiency in managing its trade payables. A higher turnover implies that Toro Co is paying its suppliers promptly, which can help maintain good relationships and potentially negotiate better terms.

4. Working capital turnover: The working capital turnover of Toro Co has ranged between 4.16 and 8.85, demonstrating how effectively the company utilizes its working capital to generate sales. A higher turnover indicates that Toro Co is utilizing its working capital efficiently to support business operations and drive revenue growth.

Overall, the analysis of Toro Co's activity ratios suggests that the company is effectively managing its resources to drive operational efficiency and support its business activities.

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Average number of days

The Days of Inventory on Hand (DOH) for Toro Co have shown some fluctuations over the past few periods, ranging from a low of 71.87 days to a high of 105.86 days. Generally, the company has been able to maintain its inventory for approximately 90 days. This indicates that on average, Toro holds inventory for about three months before it is sold or used in production.

In terms of Days of Sales Outstanding (DSO), Toro Co's collection period has also varied, with a low of 27.11 days and a high of 52.25 days. On average, the company collects its receivables in about 33 days. A lower DSO is generally more favorable as it indicates that the company is efficient in collecting payments from customers.

The Number of Days of Payables for Toro Co has ranged from 33.64 days to 56.07 days, with an average payment period of around 44 days. This suggests that the company takes approximately 44 days to pay its suppliers and creditors on average.

Overall, analyzing these activity ratios provides insight into Toro Co's efficiency in managing its inventory, collecting receivables, and paying its bills. A lower DOH and DSO are generally positive indicators, while a longer payable period indicates that the company may be taking longer to pay its suppliers, which can sometimes be advantageous in managing cash flow.

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Long-term

The Fixed Asset Turnover ratio measures how efficiently a company is utilizing its fixed assets to generate sales. In the case of Toro Co, the trend in the Fixed Asset Turnover ratio has been relatively stable over the past few quarters, ranging between 6.80 and 8.36. This indicates that Toro Co has been effectively managing its fixed assets to generate sales revenue.

On the other hand, the Total Asset Turnover ratio reflects the company's overall efficiency in using its total assets to generate sales. The trend for Toro Co in this ratio shows some fluctuation, with values ranging from 1.13 to 1.34. Although there is some variability, the company's Total Asset Turnover ratio has generally remained within a reasonable range, indicating that Toro Co is efficiently utilizing its total assets to generate sales.

Overall, based on the analysis of the long-term activity ratios for Toro Co, the company appears to be effectively managing its assets to generate sales revenue. The company's ability to maintain stable or improving turnover ratios suggests good operational efficiency and asset utilization.