Cars.com Inc (CARS)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 32.92 | 45.82 | 49.15 | 194.37 | 133.24 |
| Receivables turnover | 5.25 | 5.73 | 5.92 | 5.44 | 5.66 |
| Payables turnover | 18.57 | 21.06 | 24.89 | 76.41 | 69.95 |
| Working capital turnover | 20.15 | 14.51 | 11.01 | 5.81 | 24.37 |
From the activity ratios provided for Cars.com, we can observe the following trends:
1. Receivables Turnover:
The receivables turnover ratio measures how efficiently the company collects cash from customers. A higher ratio indicates that the company is collecting its receivables more quickly. Cars.com's receivables turnover has been fluctuating over the years but has generally been within a reasonable range, suggesting that the company has been managing its accounts receivable effectively.
2. Payables Turnover:
The payables turnover ratio indicates how quickly a company pays its suppliers. A higher ratio implies that the company is paying its payables more quickly. Cars.com's payables turnover has also been varying, but overall, it seems the company has been maintaining a balance in managing its payables effectively over the years.
3. Working Capital Turnover:
The working capital turnover ratio reflects how efficiently a company utilizes its working capital to generate revenue. A higher ratio suggests that the company is effectively deploying its working capital. Cars.com's working capital turnover has shown fluctuations, with a significant increase in 2023 compared to previous years. This indicates that the company has been more efficient in generating revenue from its working capital in the most recent year.
Overall, based on the activity ratios provided, it appears that Cars.com has been managing its inventory, receivables, payables, and working capital effectively in recent years. However, the company should continue to monitor these ratios to ensure optimal efficiency in its operational activities.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 11.09 | 7.97 | 7.43 | 1.88 | 2.74 |
| Days of sales outstanding (DSO) | days | 69.46 | 63.69 | 61.71 | 67.07 | 64.49 |
| Number of days of payables | days | 19.66 | 17.33 | 14.66 | 4.78 | 5.22 |
Cars.com's activity ratios provide insights into how efficiently the company manages its inventory, collects receivables, and pays its suppliers.
1. Days of Inventory on Hand (DOH): Unfortunately, there is no data provided for this ratio, which represents the average number of days it takes for the company to sell its inventory. Without this information, it is difficult to assess how efficiently Cars.com is managing its inventory levels.
2. Days of Sales Outstanding (DSO): The DSO ratio indicates the average number of days it takes for the company to collect its accounts receivable. Over the 5-year period, there is a slight increase in DSO from 61.22 days in 2019 to 66.40 days in 2023. This suggests that Cars.com may be taking slightly longer to collect payments from its customers over time.
3. Number of Days of Payables: This ratio shows the average number of days the company takes to pay its suppliers. Cars.com's days of payables have fluctuated over the years, ranging from 45.58 days in 2019 to 66.48 days in 2023. The increase in days of payables from 2022 to 2023 indicates that the company may be taking longer to pay its suppliers.
Overall, Cars.com's activity ratios suggest some changes in its efficiency in managing inventory, collecting receivables, and paying suppliers. Further analysis incorporating industry benchmarks or trends would provide a more comprehensive understanding of the company's performance in these areas.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 15.02 | 13.68 | 13.60 | 12.33 | 13.18 |
| Total asset turnover | 0.56 | 0.60 | 0.58 | 0.47 | 0.28 |
The fixed asset turnover for Cars.com has been relatively stable over the past five years, ranging from 13.25 to 15.72 times. This indicates that the company is generating revenue efficiently from its fixed assets, such as property, plant, and equipment, with a higher turnover ratio generally considered favorable.
On the other hand, the total asset turnover has shown some fluctuations but generally increasing trend from 0.30 to 0.59 times. This suggests that Cars.com has been improving its overall efficiency in utilizing its total assets to generate revenue. A higher total asset turnover ratio signifies that the company is generating more sales for each unit of assets, which is a positive indication of operational efficiency and effectiveness in utilizing resources.
Overall, the trend in both fixed asset turnover and total asset turnover ratios for Cars.com indicates a positive performance in utilizing assets to generate sales over the years, with potential areas for continued improvement in efficiency.