Toro Co (TTC)
Return on assets (ROA)
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 329,700 | 443,300 | 409,880 | 329,701 | 273,983 |
| Total assets | US$ in thousands | 3,644,300 | 3,556,000 | 2,936,140 | 2,853,230 | 2,330,550 |
| ROA | 9.05% | 12.47% | 13.96% | 11.56% | 11.76% |
October 31, 2023 calculation
ROA = Net income ÷ Total assets
= $329,700K ÷ $3,644,300K
= 9.05%
The return on assets (ROA) is a financial ratio that measures a company's ability to generate profits from its assets. By analyzing the ROA trend for Toro Co. over the past five years, we can gain insights into the company's efficiency in utilizing its assets to generate earnings.
In 2023, Toro Co.'s ROA stood at 9.05%, marking a decrease from the previous year. This decline suggests that the company's ability to generate profits from its assets weakened compared to the prior period. The 2023 ROA of 9.05% indicates that for every dollar of assets the company holds, it generated approximately 9.05 cents in net income.
Comparing this to previous years, Toro Co. exhibited a declining trend in ROA from 2021 to 2023, with 2021 showing the highest ROA at 13.96%. This indicates a notable decrease in the company's ability to efficiently utilize its assets to generate earnings.
The declining trend in ROA should prompt further investigation into the company's asset management, as a decreasing ROA may signal issues with asset efficiency, profitability of operations, or increased asset base without a proportional increase in earnings.
Overall, based on the ROA trend, Toro Co. experienced a decline in its ability to generate profits from its assets in 2023 compared to previous years, and this trend should be closely monitored to understand the factors impacting the company's overall performance and profitability.