CarGurus (CARG)

Working capital 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
Total current assets US$ in thousands 391,191 557,366 563,108 331,976 218,954
Total current liabilities US$ in thousands 115,178 98,733 170,709 66,536 73,758
Working capital turnover 3.32 3.61 2.42 2.08 4.06

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $916,367K ÷ ($391,191K – $115,178K)
= 3.32

CarGurus Inc's working capital turnover has exhibited fluctuations over the past five years, ranging from a low of 2.08 in 2020 to a peak of 4.06 in 2019. The trend indicates variability in the company's efficiency in generating revenue relative to its working capital. In 2023, the working capital turnover decreased to 3.31 from 3.61 in 2022, suggesting a potential decline in the company's ability to efficiently utilize its working capital to generate sales. Despite the year-over-year decrease, the current turnover ratio remains relatively healthy compared to previous years. This metric indicates the number of times CarGurus Inc can convert its working capital into revenue, highlighting the effectiveness of the company in managing its operating cycle. Further analysis and comparison with industry benchmarks could provide additional insights into the company's liquidity management and operational efficiency.