Toro Co (TTC)
Financial leverage ratio
| Feb 2, 2024 | Oct 31, 2023 | Aug 4, 2023 | Feb 3, 2023 | Oct 31, 2022 | Jul 29, 2022 | Apr 29, 2022 | Jan 28, 2022 | Oct 31, 2021 | Jul 30, 2021 | Apr 30, 2021 | Jan 29, 2021 | Oct 31, 2020 | Jul 31, 2020 | May 1, 2020 | Jan 31, 2020 | Oct 31, 2019 | Aug 2, 2019 | May 3, 2019 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,801,100 | 3,644,300 | 3,585,890 | 3,654,900 | 3,556,000 | 3,439,950 | 3,479,310 | 3,253,040 | 2,936,140 | 2,968,050 | 2,996,110 | 2,875,140 | 2,853,230 | 2,813,860 | 2,811,480 | 2,491,610 | 2,330,550 | 2,309,730 | 2,466,000 | 1,622,810 |
| Total stockholders’ equity | US$ in thousands | 1,547,900 | 1,510,900 | 1,477,080 | 1,444,200 | 1,351,700 | 1,286,600 | 1,223,520 | 1,119,550 | 1,151,130 | 1,237,180 | 1,229,420 | 1,179,720 | 1,114,830 | 1,054,030 | 984,950 | 912,050 | 859,578 | 843,822 | 805,277 | 694,397 |
| Financial leverage ratio | 2.46 | 2.41 | 2.43 | 2.53 | 2.63 | 2.67 | 2.84 | 2.91 | 2.55 | 2.40 | 2.44 | 2.44 | 2.56 | 2.67 | 2.85 | 2.73 | 2.71 | 2.74 | 3.06 | 2.34 |
February 2, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,801,100K ÷ $1,547,900K
= 2.46
The financial leverage ratio of Toro Co. has fluctuated over the past eight quarters, ranging from a low of 2.40 in Q2 2023 to a high of 2.84 in Q2 2022. The ratio indicates that Toro Co. relies more on debt financing to fund its operations compared to equity.
A financial leverage ratio above 1 implies that the company has more debt than equity in its capital structure, with higher ratios indicating higher levels of financial risk. Therefore, the increasing trend in the financial leverage ratio from Q1 2023 to Q2 2022 may suggest that Toro Co. has been taking on more debt relative to its equity over that time period.
It is essential for Toro Co. to carefully manage its debt levels to ensure that it can meet its financial obligations and maintain a healthy balance sheet. Additionally, investors and creditors may closely monitor changes in the financial leverage ratio as it can impact the company's ability to generate returns and handle financial pressures.