AutoNation Inc (AN)

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	0.74	0.80	0.78	0.79	0.77	0.83	0.83	0.83	0.92	1.05	1.13	1.16	0.92	0.98	0.92	1.02	1.00	0.98	0.92	0.95
Quick ratio	0.01	0.01	0.02	0.01	0.01	0.01	0.01	0.02	0.02	0.15	0.12	0.22	0.02	0.03	0.02	0.10	0.14	0.09	0.07	0.08
Cash ratio	0.01	0.01	0.02	0.01	0.01	0.01	0.01	0.02	0.02	0.15	0.12	0.22	0.02	0.03	0.02	0.10	0.14	0.09	0.07	0.08

AutoNation Inc's liquidity ratios provide insight into the company's ability to meet short-term financial obligations.

1. Current Ratio: This ratio measures the company's ability to cover short-term liabilities with its current assets. AutoNation's current ratio has fluctuated over the years, ranging from a low of 0.74 to a high of 1.16. A ratio below 1 indicates potential financial distress, while a ratio above 1 suggests adequate liquidity. AutoNation's current ratios have generally stayed above 1 since March 2021, indicating improved short-term liquidity.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, reflects the company's ability to cover its short-term liabilities without relying on inventory. AutoNation's quick ratio has varied significantly, with values as low as 0.01 and as high as 0.22. A higher quick ratio is preferable as it indicates a stronger ability to meet short-term obligations. AutoNation's quick ratio improved notably in the first quarter of 2022, suggesting enhanced liquidity without inventory considerations.

3. Cash Ratio: The cash ratio focuses solely on the company's ability to cover its current liabilities with its cash and cash equivalents. AutoNation's cash ratio aligns closely with its quick ratio trends, indicating limited reliance on inventory for short-term obligations. The company's cash ratio reflects a similar improvement in liquidity in the first quarter of 2022.

Overall, AutoNation Inc has shown varying levels of liquidity over the years, with improvements in the first quarter of 2022 evident in both the current, quick, and cash ratios. Continuous monitoring of these ratios is crucial for assessing the company's ongoing liquidity position and financial health.

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	55.50	59.29	59.15	49.57	50.61	44.54	43.80	37.48	34.42	31.33	32.62	28.88	32.29	26.74	32.45	46.13	56.38	54.33	52.79	76.54

The cash conversion cycle of AutoNation Inc has shown fluctuations over the periods provided. The company had a cash conversion cycle of 76.54 days as of March 31, 2020, which decreased to 32.45 days as of June 30, 2021. This indicates that AutoNation was able to convert its investments in inventory back into cash more efficiently during this period.

However, the cash conversion cycle increased to 59.15 days as of June 30, 2024, and then slightly decreased to 55.50 days as of December 31, 2024. This suggests that there may have been issues in managing working capital efficiently during these periods, resulting in a longer time to convert inventory into cash.

Overall, fluctuations in the cash conversion cycle can be influenced by factors such as inventory management practices, accounts receivable collection efficiency, and accounts payable turnover. AutoNation Inc should continue to focus on optimizing its cash conversion cycle to improve liquidity and operational efficiency.