Toro Co (TTC)
Total 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 |
| Total assets | US$ in thousands | 3,644,300 | 3,556,000 | 2,936,140 | 2,853,230 | 2,330,550 |
| Total asset turnover | 1.23 | 1.26 | 1.34 | 1.17 | 1.33 |
October 31, 2023 calculation
Total asset turnover = Revenue ÷ Total assets
= $4,494,500K ÷ $3,644,300K
= 1.23
The total asset turnover ratio measures how efficiently a company is utilizing its assets to generate sales. A higher ratio indicates more efficient asset utilization. In the case of Toro Co., the total asset turnover has fluctuated over the past five years, ranging from 1.18 to 1.35.
The downward trend from 2021 to 2023 suggests a potential decrease in asset efficiency. This could be attributed to factors such as increased asset investment without proportional revenue growth or inefficiencies in the utilization of existing assets.
It is important for Toro Co. to closely examine its asset management and sales strategies to identify areas for improvement in asset utilization, as a higher total asset turnover ratio generally signifies better operational performance.