Toro Co (TTC)

Toro Co's liquidity ratios have shown fluctuations over the past few periods. The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has generally been above 1, indicating that Toro Co has had sufficient current assets to meet its short-term obligations.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. This ratio has varied more significantly, with a recent low of 0.49 and a high of 2.06. A lower quick ratio may suggest potential difficulties in meeting immediate obligations without relying on inventory.

The cash ratio, which is the most conservative liquidity measure, has also fluctuated, indicating Toro Co's ability to cover current liabilities with its most liquid assets. The company's cash ratio has shown a wider range, from 0.13 to 1.63, with a recent value of 0.20.

Overall, Toro Co's liquidity position appears to have been relatively stable, with the current ratio consistently above 1 and the quick ratio fluctuating but generally maintaining a level above 0.5. However, the lower values in some periods suggest potential liquidity challenges that the company may need to manage to ensure continued financial stability.

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Additional liquidity measure

The cash conversion cycle of Toro Co has shown some fluctuations over the past few years. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

From the data provided, we can observe that the cash conversion cycle has ranged from a low of 53.57 days to a high of 109.01 days over the referenced periods. A shorter cash conversion cycle is generally preferred as it indicates that the company is able to efficiently manage its working capital and quickly convert its investments into cash.

Toro Co's cash conversion cycle has varied significantly, with the lowest point being 53.57 days in January 2022 and the highest point being 109.01 days in February 2024. It's important to note that a longer cash conversion cycle can indicate inefficiencies in managing inventory, collecting receivables, or paying suppliers, which may lead to cash flow challenges.

Analyzing the trend, Toro Co's cash conversion cycle has generally decreased from January 2022 to January 2021, indicating improved efficiency in managing working capital. However, there was a slight increase in the cycle from May 2022 to August 2024, suggesting a potential need for further optimization in working capital management.

Overall, Toro Co should continue monitoring its cash conversion cycle closely to ensure efficient management of working capital and strive to maintain a balance between investment in inventory and timely collection of receivables to enhance cash flow and overall financial performance.