Toro Co (TTC)
Financial leverage ratio
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,582,800 | 3,644,300 | 3,556,000 | 2,936,140 | 2,853,230 |
| Total stockholders’ equity | US$ in thousands | 1,551,900 | 1,510,900 | 1,351,700 | 1,151,130 | 1,114,830 |
| Financial leverage ratio | 2.31 | 2.41 | 2.63 | 2.55 | 2.56 |
October 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,582,800K ÷ $1,551,900K
= 2.31
The financial leverage ratio for Toro Co has been fluctuating over the past five years, ranging from 2.31 to 2.63. This ratio indicates the company's level of financial leverage or the extent to which it relies on debt financing. A higher ratio suggests a higher level of financial leverage, indicating that the company has a higher proportion of debt in its capital structure compared to equity.
The decreasing trend in the financial leverage ratio from 2.63 in 2022 to 2.31 in 2024 indicates that Toro Co has been gradually reducing its reliance on debt financing and moving towards a more balanced capital structure. This can be seen as a positive sign as lower leverage ratios generally imply lower financial risk and greater financial stability for the company.
It is important for investors and stakeholders to monitor Toro Co's financial leverage ratio to assess the company's ability to manage its debt obligations and to evaluate the overall risk profile of the business. Overall, the decreasing trend in the financial leverage ratio suggests Toro Co's efforts to strengthen its financial position and reduce its dependency on debt financing.