CarGurus (CARG)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 894,384 | 914,242 | 1,655,040 | 951,373 | 551,451 |
| Total current assets | US$ in thousands | 391,206 | 391,191 | 557,366 | 563,108 | 331,976 |
| Total current liabilities | US$ in thousands | 93,051 | 115,178 | 98,733 | 170,709 | 66,536 |
| Working capital turnover | 3.00 | 3.31 | 3.61 | 2.42 | 2.08 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $894,384K ÷ ($391,206K – $93,051K)
= 3.00
The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate revenue. In the case of CarGurus, the trend in working capital turnover over the years indicates an improvement in efficiency.
As of December 31, 2020, CarGurus had a working capital turnover ratio of 2.08, which increased to 2.42 by December 31, 2021. This signifies that the company generated $2.42 in revenue for every dollar of working capital invested.
Over the subsequent years, the working capital turnover continued to increase to 3.61 by December 31, 2022, indicating a significant enhancement in efficiency. The ratio slightly dipped to 3.31 by December 31, 2023, but remained at a relatively high level, suggesting continued effectiveness in utilizing its working capital.
By the end of December 31, 2024, the working capital turnover stood at 3.00, showing that CarGurus was still effectively leveraging its working capital to generate revenue, albeit at a slightly lower rate compared to the previous year.
Overall, the increasing trend in CarGurus' working capital turnover ratio from 2020 to 2022 reflects improved operating efficiency and better utilization of resources to drive revenue growth.
Peer comparison
Dec 31, 2024