Asbury Automotive Group Inc (ABG)

Liquidity ratios

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
Current ratio 1.11 1.20 1.25 1.06 1.06 2.07 1.91 1.92 1.85 1.56 1.38 1.14 1.21 1.75 1.49 1.26 1.15 1.07 1.78 1.48
Quick ratio 0.03 0.03 0.03 0.01 0.02 0.05 0.08 0.28 0.23 0.13 0.10 0.19 0.12 0.50 0.13 0.03 0.00 0.00 0.69 0.33
Cash ratio 0.03 0.03 0.03 0.01 0.02 0.05 0.08 0.28 0.23 0.13 0.10 0.19 0.12 0.50 0.13 0.03 0.00 0.00 0.69 0.33

Asbury Automotive Group Inc's current ratio has shown fluctuations over the past few years, starting at 1.48 on March 31, 2020, peaking at 2.07 on September 30, 2023, and then declining to 1.11 by December 31, 2024. The current ratio measures the company's ability to cover its short-term liabilities with its current assets. Generally, a current ratio above 1 indicates that the company can comfortably meet its short-term obligations.

On the other hand, the quick ratio, which excludes inventory from current assets, provides a more stringent measure of liquidity. Asbury's quick ratio has also varied significantly during the period under review, reaching its highest point of 0.69 on June 30, 2020, and hitting its lowest level of 0.01 on March 31, 2024. A quick ratio below 1 may suggest a potential challenge in meeting short-term liabilities without relying on selling inventory.

The cash ratio, which is the most conservative liquidity measure as it only considers cash and cash equivalents, has followed a similar trend to the quick ratio for Asbury Automotive Group Inc. It has fluctuated over time, demonstrating the company's ability to cover its current liabilities purely with available cash resources.

Overall, the liquidity ratios of Asbury Automotive Group Inc show variability, with periods of strength and weakness in its ability to meet short-term obligations. It is essential for the company to maintain a healthy balance between current assets and liabilities to ensure its financial stability and ability to navigate unexpected challenges.


Additional liquidity measure

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
Cash conversion cycle days 50.52 54.12 57.34 53.76 53.50 38.18 36.53 32.62 28.39 26.15 27.74 27.68 33.04 19.65 28.13 44.00 54.07 53.64 40.91 64.63

Asbury Automotive Group Inc's cash conversion cycle has shown fluctuating trends over the analyzed period. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a high of 64.63 days to a low of 19.65 days. A decreasing trend in the cash conversion cycle is generally positive as it indicates that the company is managing its working capital more efficiently.

The company's cash conversion cycle decreased significantly from March 31, 2020, to September 30, 2021, indicating improvements in inventory management and collection of receivables. However, there was an increase in the cash conversion cycle from December 31, 2021, to December 31, 2024, reaching a level similar to that in early 2020. This increase may suggest challenges in managing working capital efficiently, potentially caused by changes in sales patterns, payment terms, or inventory levels.

Overall, a lower cash conversion cycle is desirable as it implies that the company is able to convert its resources into cash faster, improving liquidity and operational efficiency. Asbury Automotive Group Inc should continue to monitor and manage its cash conversion cycle to optimize its working capital management and enhance financial performance.