Asbury Automotive Group Inc (ABG)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.81 | 12.86 | 11.05 | 6.75 | 6.13 |
| Receivables turnover | 65.47 | 89.78 | 42.81 | 45.86 | 52.94 |
| Payables turnover | 77.42 | 83.67 | 48.42 | 60.54 | 73.95 |
| Working capital turnover | 81.60 | 17.61 | 29.68 | 39.12 | 20.28 |
Asbury Automotive Group Inc's activity ratios provide insights into how efficiently the company manages its inventory, receivables, payables, and working capital.
1. Inventory Turnover:
- The inventory turnover has fluctuated over the years. In 2023, it decreased to 6.81 from 12.86 in 2022, indicating that the company took longer to sell its inventory in 2023. This suggests a potential issue with inventory management or a decrease in sales volume.
2. Receivables Turnover:
- The receivables turnover has been relatively high across the years, indicating that the company efficiently collects payments from customers. The significant decrease in 2023 to 65.47 from 89.78 in 2022 may indicate a longer collection period for receivables, which could be a red flag regarding the company's credit policies or customer payment behaviors.
3. Payables Turnover:
- The payables turnover has remained relatively stable over the years, showing how quickly the company pays its suppliers. A decrease in 2023 to 77.42 from 83.67 in 2022 could suggest a lengthening of the payment period or a change in the company's relationship with suppliers.
4. Working Capital Turnover:
- The working capital turnover indicates how effectively the company utilizes its working capital to generate revenue. A sharp increase in 2023 to 81.47 from 17.61 in 2022 indicates a significant improvement in efficiency in using working capital to generate sales.
Overall, the analysis of Asbury Automotive Group Inc's activity ratios suggests areas of both strength and potential concern in its management of inventory, receivables, payables, and working capital. Further investigation and comparison with industry benchmarks could provide additional insights into the company's operational efficiency and financial health.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 53.58 | 28.39 | 33.04 | 54.07 | 59.51 |
| Days of sales outstanding (DSO) | days | 5.58 | 4.07 | 8.53 | 7.96 | 6.89 |
| Number of days of payables | days | 4.71 | 4.36 | 7.54 | 6.03 | 4.94 |
Asbury Automotive Group Inc's activity ratios indicate how efficiently the company manages its inventory, collects receivables, and pays its creditors.
1. Days of Inventory on Hand (DOH):
- The trend in DOH shows an improvement from 59.51 days in 2019 to 53.58 days in 2023, indicating the company is managing its inventory more efficiently.
- A lower DOH suggests that Asbury Automotive is selling its inventory at a faster rate, which can lead to lower holding costs and higher turnover.
2. Days of Sales Outstanding (DSO):
- DSO has fluctuated over the years, with a decrease from 8.53 days in 2021 to 5.58 days in 2023.
- A lower DSO implies that the company is collecting receivables more quickly, improving cash flow and reducing the risk of bad debts.
3. Number of Days of Payables:
- The company's payables period has been relatively stable over the years, with 4.71 days in 2023.
- A longer payables period may indicate that Asbury Automotive is taking advantage of credit terms provided by suppliers, improving its cash flow.
Overall, the decreasing trends in DOH and DSO, coupled with stable payables days, suggest that Asbury Automotive Group Inc is efficiently managing its working capital and operating cycle, which could enhance profitability and financial stability.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 6.39 | 7.95 | 4.94 | 7.46 | 7.93 |
| Total asset turnover | 1.46 | 1.92 | 1.23 | 1.94 | 2.48 |
Asbury Automotive Group Inc's long-term activity ratios, namely the fixed asset turnover and total asset turnover, provide insights into the efficiency with which the company utilizes its assets to generate revenue.
1. Fixed Asset Turnover:
The fixed asset turnover ratio measures the company's ability to generate sales from its fixed assets. Asbury Automotive Group Inc's fixed asset turnover has fluctuated over the past five years, with the highest ratio recorded in 2022 at 7.95 and the lowest in 2021 at 4.94. A higher fixed asset turnover ratio indicates that the company is effectively utilizing its fixed assets to generate sales. However, the decreasing trend in the fixed asset turnover ratio from 2022 to 2021 may suggest a decrease in efficiency in generating sales from fixed assets during that period.
2. Total Asset Turnover:
The total asset turnover ratio gauges the efficiency of the company in generating sales from all its assets. Asbury Automotive Group Inc's total asset turnover has also shown variability over the past five years, with the highest ratio in 2019 at 2.48 and the lowest in 2021 at 1.23. A higher total asset turnover ratio indicates that the company effectively generates revenue from its total asset base. The decreasing trend in the total asset turnover ratio from 2019 to 2021 may imply a decrease in the efficiency of utilizing total assets to generate sales during that period.
Overall, the analysis of Asbury Automotive Group Inc's long-term activity ratios suggests fluctuations in the efficiency of generating sales from fixed and total assets over the past five years. Further examination and comparison with industry benchmarks may provide additional insights into the company's operational performance and asset utilization efficiency.