Toro Co (TTC)
Working capital turnover
| Feb 2, 2024 | Oct 31, 2023 | Aug 4, 2023 | Feb 3, 2023 | Oct 31, 2022 | Jul 29, 2022 | Apr 29, 2022 | Jan 28, 2022 | Oct 31, 2021 | Jul 30, 2021 | Apr 30, 2021 | Jan 29, 2021 | Oct 31, 2020 | Jul 31, 2020 | May 1, 2020 | Jan 31, 2020 | Oct 31, 2019 | Aug 2, 2019 | May 3, 2019 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 4,155,572 | 4,330,332 | 4,513,330 | 4,687,980 | 4,478,917 | 4,272,115 | 4,090,565 | 3,991,095 | 3,930,922 | 3,818,221 | 3,681,069 | 3,468,487 | 3,362,350 | 3,255,772 | 3,261,817 | 3,294,455 | 3,138,084 | 2,943,008 | 2,760,116 | 2,673,360 |
| Total current assets | US$ in thousands | 1,966,500 | 1,798,800 | 1,731,790 | 1,757,700 | 1,675,400 | 1,604,360 | 1,663,680 | 1,437,260 | 1,489,180 | 1,545,790 | 1,559,490 | 1,456,740 | 1,427,650 | 1,384,250 | 1,374,550 | 1,220,510 | 1,122,890 | 1,130,400 | 1,270,270 | 933,932 |
| Total current liabilities | US$ in thousands | 921,900 | 948,600 | 907,498 | 988,000 | 1,063,600 | 1,011,260 | 1,110,730 | 986,064 | 937,019 | 958,440 | 988,904 | 819,541 | 855,797 | 797,112 | 855,733 | 824,307 | 756,970 | 756,403 | 841,774 | 564,978 |
| Working capital turnover | 3.98 | 5.09 | 5.48 | 6.09 | 7.32 | 7.20 | 7.40 | 8.85 | 7.12 | 6.50 | 6.45 | 5.44 | 5.88 | 5.55 | 6.29 | 8.32 | 8.58 | 7.87 | 6.44 | 7.25 |
February 2, 2024 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $4,155,572K ÷ ($1,966,500K – $921,900K)
= 3.98
The working capital turnover for Toro Co. has shown a decreasing trend over the last eight quarters, starting from 7.45 in Q2 2022 and decreasing to 4.22 in Q1 2024. This indicates that the company's ability to efficiently utilize its working capital to generate sales revenue has been declining over time.
A high working capital turnover ratio generally suggests that the company is effectively managing its working capital to support sales growth. In contrast, a decreasing ratio may imply inefficient working capital management, potentially resulting in excess inventory or accounts receivable.
It is important for Toro Co. to closely monitor its working capital turnover and investigate the reasons behind the decline. Possible actions to improve this ratio could include streamlining inventory management, optimizing accounts receivable collection processes, or negotiating better payment terms with suppliers. By addressing these inefficiencies, the company can enhance its financial performance and overall profitability.