Toro Co (TTC)
Solvency ratios
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.28 | 0.28 | 0.24 | 0.24 | 0.27 |
| Debt-to-capital ratio | 0.41 | 0.42 | 0.38 | 0.38 | 0.42 |
| Debt-to-equity ratio | 0.68 | 0.73 | 0.60 | 0.62 | 0.72 |
| Financial leverage ratio | 2.41 | 2.63 | 2.55 | 2.56 | 2.71 |
The solvency ratios of Toro Co. provide valuable insights into the company's ability to meet its long-term financial obligations. The debt-to-assets ratio has remained relatively stable over the five-year period, ranging from 0.24 to 0.30, indicating that the company has maintained a consistently low level of debt relative to its total assets.
Similarly, the debt-to-capital ratio has also shown a consistent trend, staying within the range of 0.38 to 0.45. This suggests that the company has been able to effectively manage its debt in proportion to its overall capital structure.
The debt-to-equity ratio has fluctuated over the years but generally trended downward from 0.82 in 2019 to 0.68 in 2023. This indicates a decrease in the company's reliance on debt financing relative to equity, which can be seen as a positive sign of improved financial stability.
The financial leverage ratio, which measures the extent to which a company is using debt to finance its operations, has shown a slight decrease from 2.71 in 2019 to 2.41 in 2023. This suggests that the company has been able to reduce its reliance on debt to support its assets and operations.
Overall, the solvency ratios of Toro Co. indicate a consistent and prudent approach to managing its long-term financial obligations, as evidenced by the company's ability to maintain a healthy balance between debt and other financial components over the years.
Coverage ratios
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 7.82 | 16.48 | 18.44 | 13.28 | 12.17 |
The interest coverage ratio measures a company's ability to meet its interest obligations with its operating income. The trend in Toro Co.'s interest coverage ratio shows fluctuations over the past five years. In 2023, the interest coverage ratio was 9.91, indicating that Toro Co.'s operating income was sufficient to cover its interest expenses approximately 9.91 times. This represents a decrease from the previous year when the ratio was 16.11.
In 2021, the interest coverage ratio was 18.08, reflecting a significant improvement from the previous year. However, in 2020 and 2019, the ratio decreased to 13.37 and 12.46, respectively, indicating a slight downward trend in the company's ability to cover its interest expenses with operating income.
Overall, while Toro Co. has historically demonstrated a strong ability to cover its interest expenses, the decreasing trend in the interest coverage ratio over the past few years may warrant further analysis to understand the factors contributing to this trend.