CarGurus (CARG)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 4.20 | 2.95 | 2.47 | 2.69 | 3.40 | 4.93 | 4.83 | 4.38 | 5.65 | 4.06 | 3.58 | 3.85 | 3.30 | 4.31 | 3.75 | 3.81 | 4.99 | 5.04 | 5.01 | 3.60 |
| Quick ratio | 3.27 | 2.23 | 1.95 | 2.14 | 2.71 | 4.12 | 4.09 | 3.68 | 4.76 | 2.72 | 2.09 | 2.52 | 1.89 | 3.13 | 2.60 | 2.94 | 4.36 | 4.40 | 4.08 | 2.67 |
| Cash ratio | 3.27 | 2.23 | 1.95 | 2.14 | 2.71 | 4.12 | 4.09 | 3.68 | 4.76 | 2.72 | 2.09 | 2.52 | 1.89 | 3.13 | 2.60 | 2.94 | 4.36 | 4.40 | 4.08 | 2.67 |
CarGurus' current ratio has fluctuated over the years, indicating the company's ability to meet its short-term obligations with its current assets. The current ratio ranged from a high of 5.65 in December 2022 to a low of 2.69 in March 2024. This suggests that the company may have had varying levels of liquidity during this period.
The quick ratio, which excludes inventory from current assets, provides a more conservative measure of liquidity. CarGurus' quick ratio also showed fluctuations, with a peak of 4.76 in December 2022 and a low of 1.89 in December 2021. This indicates that the company may have had some dependency on inventory to meet its short-term obligations in certain periods.
The cash ratio, which is the most stringent liquidity ratio as it only considers cash and cash equivalents, also showed variability for CarGurus. The cash ratio ranged from 4.76 in December 2022 to 1.89 in December 2021, highlighting the company's ability to cover its current liabilities with its most liquid assets.
Overall, CarGurus' liquidity ratios demonstrate a mixed picture of its ability to meet short-term obligations. It is important for investors and stakeholders to consider the trend of these ratios over time to assess the company's liquidity position effectively.
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 0.77 | 0.68 | 0.87 | 0.62 | 0.46 | 0.33 | 0.34 | 0.72 | 1.93 | 10.21 | 10.00 | 14.77 | 24.40 | 16.00 | 0.00 | 0.00 | 0.00 | 152.99 | 186.62 | 264.14 |
The cash conversion cycle of CarGurus has been showing a significant improvement over the years. The cash conversion cycle is a measure of the time it takes for a company to convert its investment in inventory into cash collected from customers. A shorter cash conversion cycle indicates that the company is able to efficiently manage its working capital.
From March 31, 2020, to June 30, 2020, the company's cash conversion cycle decreased from 264.14 days to 186.62 days, showing an improvement in cash efficiency. This trend continued, with further reductions in the following quarters, reaching 0.00 days by December 31, 2020, and continuing at this level until March 31, 2021.
Subsequently, the cash conversion cycle remained low throughout the next few quarters, indicating that CarGurus was able to quickly convert its inventory into cash. There was a slight uptick in the cycle to 24.40 days by December 31, 2021, but it quickly decreased to 1.93 days by the end of March 31, 2022.
By the end of June 30, 2022, the cash conversion cycle further decreased to 10.00 days, and this trend continued with minor fluctuations until the end of September 30, 2024, where the cycle stood at 0.68 days.
Overall, the declining trend in the cash conversion cycle of CarGurus indicates an improvement in the company's efficiency in managing its working capital and converting inventory into cash, which is a positive sign for the company's financial health and operational effectiveness.