AutoNation Inc (AN)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 7.19 | 10.60 | 11.31 | 6.47 | 5.39 |
| Receivables turnover | 25.90 | 31.42 | 35.40 | 24.12 | 23.27 |
| Payables turnover | 63.29 | 66.30 | 52.77 | 50.19 | 61.36 |
| Working capital turnover | — | — | — | — | — |
Autonation Inc. has shown varying trends in its activity ratios over the past five years.
- Inventory Turnover: Autonation's inventory turnover has decreased from 2019 to 2023. The ratio peaked in 2021 at 11.31, indicating that the company's inventory was turning over more frequently than in other years. However, there was a noticeable decline in 2023 to 7.19, suggesting that Autonation may have been holding more inventory relative to its sales during that year.
- Receivables Turnover: The receivables turnover ratio has also seen fluctuations over the period. The ratio was highest in 2021 at 35.40, indicating that Autonation was collecting its receivables more quickly that year. However, the ratio decreased to 25.90 in 2023, which may suggest a slower collection of receivables in that year.
- Payables Turnover: Autonation's payables turnover ratio has generally been relatively stable over the five-year period. The company was able to turn over its payables most frequently in 2023 with a ratio of 63.29, suggesting that Autonation was efficiently managing its payment obligations that year.
- Working Capital Turnover: The data does not provide information on Autonation's working capital turnover for any of the years presented, so it is not possible to analyze how effectively the company is utilizing its working capital to generate sales.
In conclusion, Autonation Inc. has experienced variations in its activity ratios, with changes in inventory turnover and receivables turnover indicating shifts in inventory management and collections processes. A consistent payables turnover ratio suggests the company's ability to manage its payment obligations efficiently. Further analysis of the working capital turnover would provide a more comprehensive view of Autonation's overall activity efficiency.
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 | 50.75 | 34.42 | 32.29 | 56.38 | 67.74 |
| Days of sales outstanding (DSO) | days | 14.09 | 11.62 | 10.31 | 15.13 | 15.68 |
| Number of days of payables | days | 5.77 | 5.51 | 6.92 | 7.27 | 5.95 |
Analyzing Autonation Inc.'s activity ratios over the last five years provides valuable insight into its operational efficiency.
1. Days of inventory on hand (DOH): Autonation Inc. has shown fluctuations in its DOH ratio over the past five years, ranging from as low as 32.29 days to as high as 67.74 days. The decrease in DOH from 2020 to 2022 indicates a more efficient management of inventory levels. However, the increase in DOH in 2023 suggests that the company may be carrying excess inventory, which could tie up capital and lead to increased holding costs.
2. Days of sales outstanding (DSO): Autonation Inc.'s DSO has generally remained relatively stable over the years, with a slight increase in 2023 compared to the previous year. This indicates that the company has been successful in collecting its accounts receivable promptly, which is a positive sign of effective credit management and liquidity management.
3. Number of days of payables: The days of payables for Autonation Inc. have fluctuated within a narrow range over the past five years. The slight decrease in days of payables in 2023 compared to the previous year may indicate a quicker turnover of payables, potentially due to improved supplier relationships or negotiating better payment terms.
Overall, while Autonation Inc. has shown some fluctuations in its activity ratios, the company's management of inventory, accounts receivable, and payables seems to be relatively effective, with some room for improvement in optimizing inventory levels and managing payables efficiently to enhance overall operational performance.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 7.11 | 7.48 | 7.56 | 6.50 | 6.72 |
| Total asset turnover | 2.25 | 2.68 | 2.89 | 2.06 | 2.02 |
The fixed asset turnover ratio for Autonation Inc. has shown a general decreasing trend over the past five years, from 7.56 in 2021 to 7.11 in 2023, indicating that the company generated $7.11 in sales for every $1 invested in fixed assets by the end of 2023. This suggests a slightly less efficient utilization of fixed assets in generating sales in the most recent year compared to previous years.
On the other hand, the total asset turnover ratio has fluctuated more significantly, reaching its peak of 2.89 in 2021 and dropping to 2.25 by the end of 2023. This ratio indicates that Autonation Inc. generated $2.25 in sales for every $1 in total assets at the end of 2023. The decline in this ratio may suggest a decrease in the company's ability to efficiently use its total assets to generate revenue in the most recent year.
Overall, while the fixed asset turnover ratio has been relatively stable with a slight decreasing trend, the total asset turnover ratio has shown more volatility and a noticeable decline in the most recent year. These ratios provide insights into Autonation Inc.'s efficiency in utilizing its fixed and total assets to generate sales, highlighting potential changes in the company's asset utilization strategies over the years.