CarGurus (CARG)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 459.88 | 793.92 | 188.85 | 14.96 | — |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 3.00 | 3.31 | 3.61 | 2.42 | 2.08 |
CarGurus' activity ratios provide insight into how efficiently the company is managing its assets and operations.
1. Inventory turnover:
- The inventory turnover ratio for CarGurus has shown a significant increase over the years, from 14.96 in 2021 to 459.88 in 2024. This indicates that the company is selling its inventory more frequently, potentially reducing carrying costs and improving cash flow.
2. Receivables turnover:
- The receivables turnover ratio is not provided for any year, indicating that there is no available data to analyze how quickly CarGurus collects its accounts receivable.
3. Payables turnover:
- Similarly, the payables turnover ratio is not available for any year, making it challenging to assess how quickly the company pays its creditors.
4. Working capital turnover:
- The working capital turnover ratio has been relatively stable over the years, ranging from 2.08 in 2020 to 3.00 in 2024. This indicates that CarGurus is generating a consistent level of revenue relative to its working capital investment.
Overall, based on the available activity ratios, CarGurus appears to be managing its inventory efficiently and generating revenue effectively in relation to its working capital. However, the lack of data for receivables and payables turnover ratios limits a full assessment of the company's overall operational efficiency and effectiveness.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 0.79 | 0.46 | 1.93 | 24.40 | — |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
The Days of Inventory on Hand (DOH) is a measure of how quickly a company sells through its inventory. CarGurus has shown a significant improvement in its inventory management over the years. The DOH has decreased steadily from 24.40 days in 2021 to just 0.79 days in 2024. This indicates that CarGurus is more efficient in selling its inventory and has reduced the time it takes to turn inventory into sales.
The Days of Sales Outstanding (DSO) measures how quickly a company collects its accounts receivable. In the case of CarGurus, the DSO data is not available for analysis from 2020 to 2024. This lack of data might indicate that CarGurus operates on a cash basis with minimal credit sales or has a very efficient collection process.
The Number of Days of Payables measures how long a company takes to pay its suppliers. The data for CarGurus shows "— days" for all years from 2020 to 2024, indicating that the information on the payment cycle to suppliers is not available. This might suggest that CarGurus has a streamlined payment process or operates on a payment-on-delivery basis.
Overall, CarGurus seems to have effectively managed its inventory turnover, but further details on accounts receivable collections and payables are needed for a complete assessment of its working capital management efficiency.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 41.24 | 29.54 | 20.07 |
| Total asset turnover | 1.08 | 0.99 | 1.79 | 1.02 | 1.10 |
The fixed asset turnover ratio for CarGurus has been showing a positive trend over the years, increasing from 20.07 in 2020 to 41.24 in 2022. This indicates that the company is generating more revenue relative to its investment in fixed assets such as property, plant, and equipment, demonstrating an improvement in asset utilization efficiency.
On the other hand, the total asset turnover ratio fluctuated during the period under review, with a decrease from 1.10 in 2020 to 1.02 in 2021, followed by a significant increase to 1.79 in 2022. However, the ratio dropped to 0.99 in 2023 before slightly recovering to 1.08 in 2024. These fluctuations suggest variations in the company's ability to generate sales from its total assets.
Overall, the analysis of CarGurus' long-term activity ratios reveals a general improvement in asset turnover efficiency, particularly in terms of fixed assets, which could indicate enhanced operational performance and management of the company's asset base over the years.