Asbury Automotive Group Inc (ABG)

Working capital turnover

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Revenue (ttm) US$ in thousands 17,188,300 16,495,500 15,925,000 15,421,400 14,802,600 14,696,900 14,896,700 15,104,500 15,434,000 14,382,800 12,922,800 11,556,600 9,837,700 9,416,900 8,856,300 7,717,400 7,131,800 6,791,800 6,788,400 7,146,800
Total current assets US$ in thousands 3,137,900 3,104,500 3,218,300 2,922,400 3,057,100 2,054,900 2,003,900 2,050,200 1,909,800 1,812,600 1,601,500 1,813,900 1,929,400 1,150,500 1,132,500 1,317,600 1,405,700 1,298,000 1,591,700 1,753,200
Total current liabilities US$ in thousands 2,836,300 2,594,200 2,565,500 2,757,400 2,875,700 994,500 1,049,600 1,068,300 1,033,400 1,158,700 1,156,900 1,584,800 1,598,000 659,200 759,300 1,048,700 1,223,400 1,212,700 893,200 1,186,000
Working capital turnover 56.99 32.33 24.39 93.46 81.60 13.86 15.61 15.38 17.61 22.00 29.07 50.44 29.69 19.17 23.73 28.70 39.12 79.62 9.72 12.60

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $17,188,300K ÷ ($3,137,900K – $2,836,300K)
= 56.99

The working capital turnover ratio measures the efficiency with which a company utilizes its working capital to generate sales revenue. A higher turnover ratio indicates that the company is effectively managing its working capital resources.

Analyzing the data provided for Asbury Automotive Group Inc, we observe fluctuations in the working capital turnover ratio over the periods reported. The trend shows some variability with occasional spikes and declines, indicating potential changes in the company's working capital management efficiency.

For instance, the working capital turnover ratio significantly increased from 12.60 on March 31, 2020, to 79.62 on September 30, 2020, which could suggest improved efficiency in utilizing working capital during that period. However, the ratio decreased to 15.38 on March 31, 2023, before showing a notable increase to 93.46 on March 31, 2024.

The working capital turnover ratio remained relatively high throughout the latter part of 2023 and into 2024, with values ranging from 32.33 on September 30, 2024, to 93.46 on March 31, 2024. This indicates a potentially strong performance in generating sales revenue relative to the level of working capital during those periods.

Overall, the company's working capital turnover ratio displays varying trends over time, suggesting fluctuations in operational efficiency in converting working capital into sales. Asbury Automotive Group Inc may benefit from further analysis to understand the factors driving these fluctuations and to make informed decisions regarding its working capital management strategies.