Toll Brothers (NYSE:TOL) has been navigating a complex financial landscape, with its leverage levels drawing close attention from investors. The company’s total liabilities stand at around $6.2 billion, supported by a solid asset base of approximately $14.5 billion and cash reserves of $1.3 billion. Despite facing a recent loss of $-0.4 billion, Toll Brothers maintains a relatively manageable debt profile, with long-term debt totaling $2.8 billion and net debt at about $1.5 billion. As the company continues to focus on residential construction within the household durables sector, its ability to sustain growth momentum in January will likely hinge on how effectively it manages its leverage and capital expenditures, which currently sit at roughly $74 million. Toll Brothers is set to release its earnings tomorrow. Currently, its Free Cash Flow Yield remains steady compared to the past year. Analysts expect Operating Cash Flow Per Share to increase to 9.21 this year, even as Days Sales Outstanding likely drops to 5.54. While interest in the household durables sector is growing, it’s worth taking a closer look at Toll Brothers’ financial health, especially its debt levels. Recent stock movements hint at a potential rebound in January, possibly driven by investor optimism. Understanding these key metrics can help us gauge whether the company is poised for a bounce or facing headwinds.
Toll Brothers financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Toll Brothers, including all of Toll Brothers's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Toll Brothers assets, the company is considered highly leveraged. Understanding the
composition and structure of overall Toll Brothers debt and outstanding corporate bonds gives a good idea of
how risky the capital structure of a business is and if it is worth investing in it. Please read more on our
technical analysis page.
Understanding Toll Total Liabilities
Toll Brothers liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Toll Brothers has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Toll Brothers balance sheet include debt obligations and money owed to different Toll Brothers vendors, workers, and loan providers. Below is the chart of Toll short long-term liabilities accounts currently reported on its balance sheet.
You can use Toll Brothers
financial leverage analysis tool to get a better grip on understanding its financial position
How important is Toll Brothers's Liquidity
Toll Brothers
financial leverage refers to using borrowed capital as a funding source to finance Toll Brothers ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Toll Brothers financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Toll Brothers' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Toll Brothers' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Toll Brothers's total debt and its cash.
A Deeper look at Toll
The firm reported the last year's revenue of 10.97
B. Total Income to common stockholders was 1.57
B with profit before taxes, overhead, and interest of 2.85
B.
Asset Breakdown
2.7 B
Non Current Assets Total
12.5 B
Total Current Assets
Non Currrent Assets Other
| Total Assets | 15.25 Billion |
| Non Current Assets Total | 2.71 Billion |
| Non Currrent Assets Other | 1.24 Billion |
| Total Current Assets | 12.53 Billion |
| Other Assets | 101.28 Million |
| Intangible Assets | 0.0 |
| Other Current Assets | 282.95 Million |
| Net Tangible Assets | 4.81 Billion |
They say, "Leverage can be a double-edged sword," and for Toll Brothers (NYSE:TOL), this holds true as the company maintains a net debt of approximately 1.5 billion dollars against a solid net asset base of 14.52 billion dollars.
Despite a relatively modest price-to-earnings ratio of 5.61X and a return on equity of 0.17, the company’s leverage levels suggest it’s balancing growth with financial risk, especially with total liabilities reaching 6.2 billion dollars. With a beta of 1.39 indicating above-average market volatility and a current valuation of around 14.72 billion dollars, Toll Brothers’ ability to sustain its momentum in January will depend on how effectively it manages its debt and cash flow, which remains healthy at over 1 billion dollars from operations. While the company’s income before tax shows a healthy 1.8 billion dollars, its potential upside of 4.26 and a relatively low dividend yield of 0.7% could attract investors looking for growth in the residential construction sector..
Toll Brothers has a small chance to finish above $142 in 2 months
Currently, Toll Brothers has a value at risk of -2.72, indicating a relatively low chance of surpassing $142 in the next two months. This points to limited upside potential in the near term, with some downside risk still present. The stock’s outlook appears cautious, and any meaningful gains would likely depend on a significant shift in market conditions or company performance. As of December 14, 2025, Toll Brothers’ risk metrics show a Coefficient of Variation of
(2,965), a risk-adjusted performance of
(0.02), and a variance of 3.45. To better understand its technical landscape, review the company’s technical drivers, including the relationship between key indicators like the information ratio and skewness. With an information ratio of
(0.08), it’s wise to verify whether Toll Brothers can maintain its current market position, especially with the share price at $139.15.
Our Conclusion on Toll Brothers
When is the right time to buy or sell Toll Brothers? Buying stocks such as Toll Brothers isn't very hard. However, what challenging for most investors is doing it at the right time. Proper market timing is something most people cannot do without sophisticated tools, which help to isolate the right opportunities, deliver winning trades and diversify portfolios on a daily basis.
To conclude, as of the 14th of December 2025, our analysis shows that Toll Brothers slowly supersedes the market. The company is
fairly valued and projects
low odds of financial distress for the next 2 years. Our up-to-date 90 days buy vs. sell advice on the company is
Strong Hold.
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Ellen Johnson is a Member of Macroaxis Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in predictive investment analytics and risk management.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Toll Brothers. Please refer to our
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