Toll Brothers, Inc., together with its subsidiaries, designs, builds, markets, and arranges finance for detached and attached homes in luxury residential communities. The company operates through two segments, Traditional Home Building and City Living. It also builds and sells homes in urban infill markets under the Toll Brothers City Living name. In addition, the company develops, owns, and operates golf courses and country clubs that are associated with various master planned communities; develops and sells land to other builders; and develops, operates, and rents apartments. The company serves move-up, empty-nester, active-adult, age-qualified, and second-home buyers in 19 states in the United States. Toll Brothers, Inc. was founded in 1967 and is headquartered in Horsham, Pennsylvania.
Business Analysis of Toll Brothers
The Consumer Goods Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Toll Brothers compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Toll Brothers to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Toll Brothers with an interactive chart.
- Revenue Growth: Toll Brothers reported a revenue growth of 23.9% year-on-year during 2016. Household Goods & Home Construction Industry grew at 18.1% in the same period
- COGS share of Revenues: As a percentage of revenue, Toll Brothers spent 80.2% of its total revenues on COGS. Household Goods & Home Construction industry average (COGS share of revenue) in the same period was 74.8%
- R&D share of Revenues: Toll Brothers R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, Toll Brothers spent 10.4% of its total revenues on Sales, Marketing, and General Administration (SG&A). Household Goods & Home Construction industry average SG&A spending in the same period was 15.0%
- Inventory share of Revenues: As a percentage of revenue, Toll Brothers spent 142.3% of its total revenues on Inventories. Household Goods & Home Construction industry average Inventory spending in the same period was 46.0%
- Accounts Payable share of Revenues: As a percentage of revenue, Toll Brothers invested 5.5% of its total revenues on Accounts Payable (A/P) Household Goods & Home Construction industry average Accounts Payable investment in the same period was 9.3%
- Accounts Receivable share of Revenues: As a percentage of revenue, Toll Brothers invested 11.3% of its total revenues on Accounts Receivable (A/R). Household Goods & Home Construction industry average Accounts Receivable investment in the same period was 8.0%
- PP&E share of Revenues: As a percentage of revenue, Toll Brothers invested 3.3% of its total revenues on Property, Plants, and Equipments (PP&E). Household Goods & Home Construction industry average PPE investment in the same period was 11.1%
- Intangibles share of Revenues: Toll Brothers Intangibles share of Revenues details are not available because either company does not share the data or we do not have it
- Net Margins: Toll Brothers Net Margins in the year 2016 were 7.4%. Household Goods & Home Construction industry average Net Margins in the same period were 5.9%
Sector and Industry Association of Toll Brothers
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.
Toll Brothers is associated with Consumer Goods Sector and Household Goods & Home Construction Industry.
Consumer Goods sector is comprised of the following industries: Beverages; Personal Goods; Food Products; Diversified Food; Household Goods & Home Construction; Food Distribution; Tobacco; Toys and Games. The definitions for each of the industries is as follows:
- Beverages industry consists of: Brewing Companies - manufacturers of cider or malt products such as beer, ale and stout; Distillers and Vintners Companies - blenders and shippers of wine and spirits such as whisky, brandy, rum, gin or liqueurs; and Soft Drinks Companies - manufacturers, bottlers and distributors of nonalcoholic beverages, such as soda, fruit juices, tea, coffee and bottled water.
- Personal Goods industry includes: Clothing & Accessories Companies - manufacturers and distributors of all types of clothing, jewellery, watches or textiles, sportswear, sunglasses, eyeglass frames, leather clothing and goods, and processors of hides and skins; Footwear Companies - manufacturers and distributors of shoes, boots, sandals, sneakers and other types of footwear; and Consumer Packaged Goods Companies - makers and distributors of cosmetics, toiletries and personal-care and hygiene products, including deodorants, soaps, toothpaste, perfumes, diapers, shampoos, razors and feminine hygiene products.
- Food Products industry includes: Farming & Fishing companies - companies that grow crops or raise livestock, operate sherries or own non-tobacco plantation; Food Products Companies - food producers, including meatpacking, snacks, fruits, vegetables, dairy products and frozen seafood. It also includes producers of pet food and manufacturers of dietary supplements, vitamins and related items.
- Diversified Food industry includes companies that offer a diverse portfolio of food products across agricultural, animal and dairy product categories.
- Household Goods & Home Construction industry includes companies that offer: Durable Household Products - Manufacturers and distributors of domestic appliances, lighting, hand tools and power tools, hardware, cutlery, tableware, garden equipment, luggage, towels and linens; Nondurable Household Products - Producers and distributors of pens, paper goods, batteries, light bulbs, tissues, toilet paper and cleaning products such as soaps and polishes; Furnishings - Manufacturers and distributors of furniture, including chairs, tables, desks, carpeting, wallpaper and office furniture; Home Construction - constructors of residential homes, including manufacturers of mobile and prefabricated homes intended for use in one place.
- Food Distribution industry includes companies that distribute food, beverage and consumer goods to restaurants, healthcare, educational facilities, lodging establishments; equipment and supplies for the foodservice and hospitality industries.
- Tobacco industry includes Manufacturers and distributors of cigarettes, cigars and other tobacco products. It also includes tobacco plantations.
- Toys and Games industry consists of manufacturers and distributors of toys and video/computer games, including such toys and games as playing cards, board games, stuffed animals and dolls.
Industry Ranking of Toll Brothers
With $5.2 billion revenues, Toll Brothers ranked number 10 of all the companies in the US Household Goods & Home Construction industry. There were a total of 52 public companies in the US Household Goods & Home Construction industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Household Goods & Home Construction industry by revenues during 2016 were:
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.
- Conduct a holistic benchmarking; to identify and target additional sources of value
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