CarGurus (CARG)

Fixed asset turnover

		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
Revenue (ttm)	US$ in thousands	894,384	888,969	877,030	898,075	914,242	977,863	1,184,898	1,456,390	1,655,035	1,707,633	1,504,094	1,210,613	951,373	763,584	688,141	565,130	551,451	558,051	561,041	611,335
Property, plant and equipment	US$ in thousands	—	—	—	—	—	238,474	48,243	42,748	40,128	36,833	35,343	33,101	32,210	29,569	98,665	29,816	27,483	27,276	92,967	96,566
Fixed asset turnover		—	—	—	—	—	4.10	24.56	34.07	41.24	46.36	42.56	36.57	29.54	25.82	6.97	18.95	20.07	20.46	6.03	6.33

December 31, 2024 calculation

Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $894,384K ÷ $—K
= —

Fixed asset turnover is a financial ratio that measures a company's efficiency in generating sales from its investment in fixed assets, such as property, plant, and equipment. A higher fixed asset turnover ratio indicates that a company is effectively using its fixed assets to generate revenue.

Analyzing the historical fixed asset turnover of CarGurus from March 31, 2020, to September 30, 2023, we observe fluctuations in the ratio. The ratio was relatively stable in the range of 6 to 7 from March 2020 to June 2021. However, there was a notable increase in the ratio in the latter half of 2021, reaching levels above 20 and peaking at 46.36 by September 30, 2022.

This significant increase in fixed asset turnover suggests that CarGurus was able to generate substantially higher sales relative to its investment in fixed assets during this period. This could imply improved operational efficiency, better asset utilization, or increased sales volume without a proportionate increase in fixed asset investments.

However, by December 31, 2023, the fixed asset turnover ratio dropped significantly to 4.10, indicating a potential decrease in sales generated from fixed assets. The absence of data for the subsequent periods from March 31, 2024, onwards limits further analysis of the trend.

In conclusion, the trend in CarGurus' fixed asset turnover ratio demonstrates both periods of efficiency gains and potential challenges in effectively utilizing fixed assets to generate sales. Continued monitoring of this ratio will be crucial in assessing the company's operational efficiency and asset management practices.