CarGurus (CARG)

Receivables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	916,367	1,656,550	951,443	551,428	589,606
Receivables	US$ in thousands	39,963	46,817	189,324	18,235	22,124
Receivables turnover		22.93	35.38	5.03	30.24	26.65

December 31, 2023 calculation

Receivables turnover = Revenue ÷ Receivables
= $916,367K ÷ $39,963K
= 22.93

The receivables turnover of CarGurus Inc has fluctuated over the past five years, as depicted in the table. In 2023, the receivables turnover ratio stood at 22.88, which indicates that the company's accounts receivable turnover was lower compared to the prior year. This may suggest that CarGurus Inc took a longer time to collect payments from its customers in 2023.

On the contrary, in 2022, the receivables turnover ratio was notably higher at 35.35, reflecting a more efficient collection process of accounts receivable during that period. The substantial increase in 2022 could be attributed to improvements in the company's credit and collection policies, resulting in faster conversion of receivables into cash.

In 2021, the receivables turnover ratio dropped significantly to 5.03, which indicates a sharp decline in the efficiency of collecting outstanding payments from customers. This may raise concerns about the company's credit risk management and collection procedures during that year.

However, in 2020 and 2019, the receivables turnover ratios were relatively high at 30.24 and 26.62, respectively, suggesting that the company had been successful in promptly collecting payments from customers in those years.

Overall, the trend in CarGurus Inc's receivables turnover indicates variability in the efficiency of managing accounts receivable over the five-year period, with notable fluctuations in collection performance. Continued monitoring and assessment of the company's receivables turnover ratio are essential to evaluate its effectiveness in managing credit and collection activities.