CarGurus (CARG)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 2,222.45 | 269.40 | 35.60 | — | 24.12 |
| Receivables turnover | 22.93 | 35.38 | 5.03 | 30.24 | 26.65 |
| Payables turnover | 15.37 | 43.74 | 10.58 | 17.11 | 13.30 |
| Working capital turnover | 3.32 | 3.61 | 2.42 | 2.08 | 4.06 |
CarGurus Inc's activity ratios provide insight into the efficiency of its operations and management of working capital.
- Inventory turnover has significantly improved over the years, indicating that the company is managing its inventory more efficiently.
- Receivables turnover has fluctuated but generally shows that CarGurus is collecting its accounts receivable at a relatively consistent rate, with a notable dip in 2021.
- Payables turnover has shown variability, with a sharp decrease in 2022, potentially indicating changes in payment terms with suppliers.
- Working capital turnover has fluctuated but generally indicates that CarGurus is generating revenue efficiently relative to its working capital, with a notable decrease in 2021.
Overall, CarGurus Inc should continue to monitor and optimize its activity ratios to ensure effective management of inventory, receivables, payables, and working capital to support its operational efficiency and financial performance.
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 | 0.16 | 1.35 | 10.25 | — | 15.13 |
| Days of sales outstanding (DSO) | days | 15.92 | 10.32 | 72.63 | 12.07 | 13.70 |
| Number of days of payables | days | 23.74 | 8.34 | 34.50 | 21.33 | 27.45 |
CarGurus Inc.'s activity ratios indicate the efficiency with which the company manages its inventory, sales, and payables.
1. Days of Inventory on Hand (DOH): CarGurus has shown significant improvement in managing its inventory over the years. The DOH has decreased from 24.40 days in 2021 to 0.46 days in 2023. This indicates that CarGurus is selling its inventory quickly, which can be a positive sign of effective inventory management and reduced inventory holding costs.
2. Days of Sales Outstanding (DSO): CarGurus has seen fluctuations in its DSO over the years. In 2021, the DSO was high at 72.64 days but decreased to 15.95 days in 2023. A lower DSO implies that the company is collecting its accounts receivable faster, which can improve cash flow and liquidity.
3. Number of Days of Payables: CarGurus has also shown variability in the number of days of payables. The days of payables have increased from 11.90 days in 2022 to 66.47 days in 2023. This suggests that the company is taking longer to pay its bills, which could indicate a cash flow advantage by delaying payments.
Overall, the trend in CarGurus Inc.'s activity ratios reflects a positive improvement in managing inventory, collecting receivables, and extending payables efficiently, which can contribute to the company's financial health and operational efficiency.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 10.99 | 41.28 | 29.54 | 20.06 | 21.10 |
| Total asset turnover | 1.00 | 1.79 | 1.02 | 1.10 | 1.50 |
The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate revenue. CarGurus Inc's fixed asset turnover has been fluctuating over the past five years, ranging from a low of 10.97 in 2023 to a high of 41.24 in 2022. A higher fixed asset turnover indicates that the company is generating more revenue per dollar of fixed assets.
On the other hand, the total asset turnover ratio reflects the company's overall efficiency in using all of its assets to generate sales. CarGurus Inc's total asset turnover has also varied significantly over the same period, with values ranging from 0.99 in 2023 to 1.79 in 2022. A higher total asset turnover implies that the company is generating more sales relative to its total assets.
Overall, the trend in CarGurus Inc's long-term activity ratios suggests that the company has experienced fluctuations in its efficiency in utilizing both fixed and total assets to generate revenue. It is important to further investigate the reasons behind these fluctuations to assess the company's operational performance and efficiency over time.