Toro Co (TTC)
Quick ratio
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 199,500 | 193,100 | 188,250 | 405,612 | 479,892 |
| Short-term investments | US$ in thousands | — | — | — | — | 19,745 |
| Receivables | US$ in thousands | 459,700 | 407,400 | 332,700 | 310,279 | 261,135 |
| Total current liabilities | US$ in thousands | 976,000 | 948,600 | 1,063,600 | 937,019 | 855,797 |
| Quick ratio | 0.68 | 0.63 | 0.49 | 0.76 | 0.89 |
October 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($199,500K
+ $—K
+ $459,700K)
÷ $976,000K
= 0.68
The quick ratio of Toro Co has exhibited fluctuations over the past five years. In Oct 2020, the company had a relatively high quick ratio of 0.89, indicating a strong ability to cover its short-term obligations with its most liquid assets. However, the quick ratio decreased to 0.76 in Oct 2021, suggesting a slight weakening in the company's short-term liquidity position.
The quick ratio further declined to 0.49 in Oct 2022, signaling a potential liquidity concern as the company may struggle to meet its short-term financial obligations with its quick assets alone. This substantial drop in the quick ratio from the previous year may raise questions about Toro Co's ability to manage its short-term liabilities effectively.
However, there was a slight improvement in the quick ratio to 0.63 in Oct 2023, indicating a partial recovery in the company's short-term liquidity position. Nonetheless, the quick ratio still remained below 1, which may indicate that Toro Co continues to rely on non-liquid assets to meet its short-term financial obligations.
In the most recent period ending Oct 2024, the quick ratio stood at 0.68, showing a marginal improvement compared to the previous year. While the uptick suggests some progress in enhancing short-term liquidity, Toro Co still falls short of having a quick ratio above 1, which is considered ideal for ensuring a robust liquidity position.
Overall, the fluctuating trend in Toro Co's quick ratio over the past five years indicates varying levels of short-term liquidity and highlights the importance of closely monitoring the company's ability to meet its immediate financial obligations without relying heavily on inventory or other non-liquid assets.