Toro Co (TTC)
Cash ratio
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 199,500 | 193,100 | 188,250 | 405,612 | 479,892 |
| Short-term investments | US$ in thousands | — | — | — | — | 19,745 |
| Total current liabilities | US$ in thousands | 976,000 | 948,600 | 1,063,600 | 937,019 | 855,797 |
| Cash ratio | 0.20 | 0.20 | 0.18 | 0.43 | 0.58 |
October 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($199,500K
+ $—K)
÷ $976,000K
= 0.20
The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations.
Looking at the trend in Toro Co's cash ratio over the past five years, we see a significant decrease from 0.58 in 2020 to 0.20 in both 2024 and 2023, suggesting a potential decline in the company's liquidity position.
The cash ratio of 0.18 in 2022 indicates a slightly weaker liquidity position compared to the previous years. However, the sharp increase to 0.43 in 2021 suggests an improvement in the company's ability to cover short-term liabilities with cash and cash equivalents.
Overall, Toro Co's cash ratio has fluctuated over the past five years, with a downward trend in recent years. This trend may raise concerns about the company's liquidity position and its ability to meet short-term obligations from its available cash resources.