Toro Co (TTC)
Financial leverage ratio
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,644,300 | 3,556,000 | 2,936,140 | 2,853,230 | 2,330,550 |
| Total stockholders’ equity | US$ in thousands | 1,510,900 | 1,351,700 | 1,151,130 | 1,114,830 | 859,578 |
| Financial leverage ratio | 2.41 | 2.63 | 2.55 | 2.56 | 2.71 |
October 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,644,300K ÷ $1,510,900K
= 2.41
The financial leverage ratio of Toro Co. has shown a decreasing trend over the past five years, declining from 2.71 in 2019 to 2.41 in 2023. This indicates that the company has been gradually reducing its reliance on debt financing in relation to equity. A lower financial leverage ratio generally signals less financial risk, as a company with lower leverage is less vulnerable to economic downturns and fluctuations in interest rates. It is evident that Toro Co. has been managing its capital structure effectively, possibly aiming to strengthen its financial position and improve its creditworthiness. This trend suggests a prudent approach to financial management and a commitment to long-term stability and sustainability.