Toro Co (TTC)
Cash conversion cycle
| Oct 31, 2024 | Aug 2, 2024 | May 3, 2024 | Feb 2, 2024 | Oct 31, 2023 | Aug 4, 2023 | May 5, 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 92.83 | 98.55 | 98.38 | 105.86 | 95.49 | 94.64 | 98.26 | 99.58 | 96.57 | 89.40 | 88.21 | 84.92 | 77.76 | 73.08 | 71.87 | 81.42 | 80.13 | 82.13 | 88.12 | 90.58 |
| Days of sales outstanding (DSO) | days | 36.87 | 43.73 | 52.25 | 41.08 | 33.09 | 30.43 | 35.34 | 29.38 | 27.11 | 29.96 | 39.20 | 33.50 | 28.81 | 28.80 | 38.79 | 32.29 | 28.35 | 33.04 | 44.81 | 35.59 |
| Number of days of payables | days | 40.45 | 39.88 | 45.62 | 37.93 | 37.74 | 34.65 | 44.87 | 41.83 | 53.17 | 46.35 | 56.07 | 48.43 | 53.00 | 45.17 | 48.20 | 43.93 | 44.70 | 33.64 | 40.39 | 42.66 |
| Cash conversion cycle | days | 89.25 | 102.40 | 105.01 | 109.01 | 90.83 | 90.42 | 88.74 | 87.13 | 70.51 | 73.00 | 71.34 | 69.99 | 53.57 | 56.71 | 62.46 | 69.78 | 63.78 | 81.53 | 92.54 | 83.51 |
October 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 92.83 + 36.87 – 40.45
= 89.25
The cash conversion cycle measures the time a company takes to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle indicates more efficient management of working capital.
Analyzing Toro Co's cash conversion cycle over the past years, we observe fluctuations in the efficiency of their working capital management. The trend shows some volatility with periods of improvement followed by increases.
The company's cash conversion cycle ranged from 53.57 days to 109.01 days over the period analyzed. In the most recent period, the cash conversion cycle stood at 89.25 days, indicating a moderate efficiency in converting resources into cash.
Overall, Toro Co has shown fluctuations in its cash conversion cycle, with periods of both efficiency and inefficiency. It would be advisable for the company to continue monitoring and managing its working capital effectively to maintain a healthy cash conversion cycle and optimize its financial performance.