Toro Co (TTC)
Quick ratio
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 193,100 | 188,250 | 405,612 | 479,892 | 151,828 |
| Short-term investments | US$ in thousands | — | — | — | 19,745 | — |
| Receivables | US$ in thousands | 407,400 | 332,700 | 310,279 | 261,135 | 268,768 |
| Total current liabilities | US$ in thousands | 948,600 | 1,063,600 | 937,019 | 855,797 | 756,970 |
| Quick ratio | 0.63 | 0.49 | 0.76 | 0.89 | 0.56 |
October 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($193,100K
+ $—K
+ $407,400K)
÷ $948,600K
= 0.63
The quick ratio of Toro Co. has fluctuated over the past five years, indicating varying levels of short-term liquidity. The quick ratio, which measures a company's ability to fulfill its short-term obligations using its most liquid assets, stood at 0.75 as of October 31, 2023. This suggests that for every dollar of current liabilities, the company had $0.75 of quick assets available to cover them.
Comparing this to previous years, the quick ratio has shown a declining trend from 0.59 in 2022 to 0.80 in 2021, before dropping to 0.91 in 2020 and then climbing again to 0.62 in 2019. This fluctuation may indicate changes in the company's ability to meet its short-term obligations.
A quick ratio below 1.0 may indicate potential difficulty in meeting short-term obligations, implying a risk of insolvency. It is essential for investors and creditors to monitor this trend to assess Toro Co.'s ability to manage its short-term financial obligations efficiently.