Toro Co (TTC)

Liquidity ratios

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
Current ratio 2.13 1.90 1.91 1.78 1.58 1.59 1.50 1.46 1.59 1.61 1.58 1.78 1.67 1.74 1.61 1.48 1.48 1.49 1.51 1.65
Quick ratio 0.75 0.63 2.06 0.56 0.49 0.58 0.63 0.57 0.76 0.89 0.92 0.93 0.89 0.86 0.70 0.52 0.56 0.60 0.72 0.84
Cash ratio 0.22 0.20 1.63 0.18 0.18 0.23 0.24 0.20 0.43 0.58 0.53 0.56 0.58 0.49 0.23 0.13 0.20 0.19 0.21 0.44

The liquidity ratios of Toro Co. reflect the company's ability to meet its short-term financial obligations. The current ratio has shown a generally increasing trend over the last eight quarters, reaching 2.13 in Q1 2024, indicating improving liquidity. This ratio suggests that Toro Co. had $2.13 in current assets for every $1 of current liabilities in Q1 2024.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also demonstrates an upward trend over the same period. Despite some fluctuations, the quick ratio increased to 0.86 in Q1 2024, indicating that Toro Co. had $0.86 in highly liquid assets to cover each dollar of current liabilities in that quarter.

The cash ratio, which is the most conservative liquidity measure as it considers only cash and cash equivalents, has been relatively stable around 0.30 over the last two years, with some minor fluctuations. This ratio stood at 0.33 in Q1 2024, meaning that Toro Co. held $0.33 in cash and cash equivalents for every dollar of current liabilities in that quarter.

Overall, Toro Co.'s liquidity ratios suggest that the company has been effectively managing its short-term liquidity position, with improving current and quick ratios providing a favorable indication of its ability to meet immediate financial obligations. The stable cash ratio indicates a consistent level of cash reserves maintained by the company.

Additional liquidity measure

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
Cash conversion cycle days 112.74 93.48 93.35 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 74.11 84.94 94.05 57.19

The cash conversion cycle of Toro Co. has shown fluctuations over the past several quarters. In Q1 2024, the company's cash conversion cycle increased to 136.24 days compared to the previous quarter, indicating a slower conversion of its investment in inventory and accounts receivable into cash. This could be a concern as it may lead to potential cash flow challenges and lower overall liquidity.

Looking at the trend over the last few quarters, Toro Co. experienced a decreasing cash conversion cycle from Q3 2022 to Q1 2023, indicating an improvement in efficiency in managing its working capital. However, from Q1 2023 to Q4 2023, there was a notable increase in the cash conversion cycle, which could suggest challenges in managing inventory levels and collecting receivables efficiently during that period.

It is worth noting that the cash conversion cycle in Q1 2024 has reached its highest point in the data provided, which warrants close monitoring by stakeholders and management. Monitoring and optimizing the components of the cash conversion cycle, including inventory turnover, accounts receivable collection, and accounts payable management, will be essential for Toro Co. to maintain healthy cash flow and working capital efficiency in the future.