Toro Co (TTC)
Working capital 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 current assets | US$ in thousands | 1,798,800 | 1,675,400 | 1,489,180 | 1,427,650 | 1,122,890 |
| Total current liabilities | US$ in thousands | 948,600 | 1,063,600 | 937,019 | 855,797 | 756,970 |
| Working capital turnover | 5.29 | 7.32 | 7.12 | 5.85 | 8.50 |
October 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $4,494,500K ÷ ($1,798,800K – $948,600K)
= 5.29
The working capital turnover ratio measures the efficiency of a company in utilizing its working capital to generate sales. A higher ratio indicates better management of working capital.
Toro Co.'s working capital turnover has fluctuated over the past five years. In 2023, the working capital turnover was 5.36, a decrease from the previous year. This suggests that the company's working capital was less effectively utilized to generate sales. Similarly, in 2021 and 2020, the ratio decreased from the prior year, indicating a possible inefficiency in working capital management during those periods.
Conversely, in 2022 and 2019, the working capital turnover ratios were higher, signifying more efficient use of working capital to generate sales. This suggests that the company effectively managed its working capital during those years, resulting in a greater turnover.
Overall, fluctuations in the working capital turnover ratio indicate varying degrees of effectiveness in utilizing working capital to generate sales over the past five years. Further analysis of the company's working capital management practices and sales generation strategies could provide insights into the reasons behind these fluctuations.