Toro Co (TTC)
Cash ratio
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 193,100 | 188,250 | 405,612 | 479,892 | 151,828 |
| Short-term investments | US$ in thousands | — | — | — | 19,745 | — |
| Total current liabilities | US$ in thousands | 948,600 | 1,063,600 | 937,019 | 855,797 | 756,970 |
| Cash ratio | 0.20 | 0.18 | 0.43 | 0.58 | 0.20 |
October 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($193,100K
+ $—K)
÷ $948,600K
= 0.20
The cash ratio is a measure of a company's ability to cover its short-term liabilities with its cash and cash equivalents. It is calculated by dividing the total cash and cash equivalents by the total current liabilities.
For Toro Co., the cash ratio has fluctuated over the past five years. In 2023, the cash ratio was 0.32, indicating that the company had $0.32 of cash and cash equivalents for every $1 of current liabilities. This represents a slight increase from 2022, when the cash ratio was 0.27. However, the ratio was notably higher in 2021 at 0.47 and even higher in 2020 at 0.60, suggesting a stronger ability to meet short-term obligations with available cash.
The decrease in the cash ratio from 2020 to 2022 may indicate a change in the company's liquidity position. It's worth noting that the cash ratio in 2019 was also 0.27, the same as in 2022, indicating a consistent level of liquidity at that time.
Overall, the cash ratio trend suggests some variability in Toro Co.'s liquidity position over the past five years, with a notable decrease from 2020 to 2022. This may warrant further investigation into the company's cash management and liquidity strategies.