Cars.com Inc (CARS)

Short-term

Turnover ratios

Activity ratios provide insights into how efficiently a company manages its assets and liabilities to generate sales. Let's analyze the activity ratios of Cars.com Inc based on the given data:

1. Inventory Turnover:
- Inventory turnover measures the number of times a company sells its entire inventory during a specific period. A higher inventory turnover indicates efficient management of inventory.
- The inventory turnover for Cars.com Inc decreased from 15.64 in 2020 to 14.62 in 2021 and further to 13.72 in 2022, suggesting a decline in the efficiency of selling inventory. However, there was a significant improvement in 2023 with a turnover of 17.67.
- There is no data available for 2024, so we cannot provide an analysis for that year.

2. Receivables Turnover:
- Receivables turnover ratio measures how efficiently a company collects cash from its credit sales. A higher turnover indicates effective management of accounts receivable.
- The data provided shows that there are no details available for the receivables turnover for any of the years, which limits our ability to assess the efficiency of Cars.com Inc in collecting receivables.

3. Payables Turnover:
- Payables turnover ratio reflects how efficiently a company pays its suppliers and vendors. A higher turnover ratio signifies prompt payment of payables.
- Similar to receivables, there is no information provided for payables turnover for any of the years, making it challenging to evaluate the company's payment practices.

4. Working Capital Turnover:
- Working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales. A higher turnover indicates effective utilization of funds.
- The working capital turnover for Cars.com Inc increased from 6.24 in 2020 to 11.74 in 2021 and further to 15.34 in 2022, showing an improvement in efficiency. However, there was a sharp increase to 21.08 in 2023, indicating a significant boost in the company's ability to generate sales using its working capital. The ratio then dropped to 7.38 in 2024, suggesting a potential decrease in efficiency in that year.

In conclusion, based on the data provided, Cars.com Inc showed fluctuations in its efficiency ratios over the years, with varying levels of effectiveness in managing inventory, working capital, and potentially accounts receivable and payables. Further data and analysis would be needed to fully assess the company's activity ratios and operational efficiency.

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Average number of days

Based on the provided data, the Days of Inventory on Hand (DOH) for Cars.com Inc have shown an increasing trend over the years. In December 2020, the company had 23.33 days of inventory on hand, which increased to 24.96 days by December 2021 and further increased to 26.60 days by December 2022. However, by December 2023, the DOH decreased to 20.66 days. It is important to note that there is no data available for December 2024.

In contrast, there is no data available for the Days of Sales Outstanding (DSO) and Number of Days of Payables for any of the years provided, suggesting that this information is not disclosed or may not be relevant for the company's operations.

Overall, the increasing trend in Days of Inventory on Hand indicates that Cars.com Inc may be carrying more inventory relative to its sales, which can have implications for working capital management and storage costs. However, without data on DSO and Number of Days of Payables, the complete analysis of the company's activity ratios is limited.

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Long-term

The long-term activity ratios for Cars.com Inc indicate how efficiently the company is utilizing its assets to generate sales.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures the company's ability to generate revenue from its fixed assets.
- For Cars.com Inc, the fixed asset turnover ratio has shown a positive trend over the years, increasing from 13.25 in 2020 to 14.50 in 2021 and maintaining a similar level in 2022 at 14.46.
- The absence of data for 2023 and 2024 prevents a complete analysis, but the consistent high ratios suggest that the company is effectively utilizing its fixed assets to generate sales.

2. Total Asset Turnover:
- The total asset turnover ratio reflects how efficiently the company is using all its assets to generate revenue.
- Cars.com Inc's total asset turnover ratio has also shown improvement over the years, increasing from 0.51 in 2020 to 0.62 in 2021, further to 0.64 in 2022, and slightly decreasing to 0.59 in 2023 before picking up to 0.65 in 2024.
- The overall increasing trend indicates that the company is becoming more efficient in generating revenue relative to its total assets.

In conclusion, based on the analysis of the fixed asset turnover and total asset turnover ratios, Cars.com Inc appears to be effectively utilizing its assets to generate sales, as evidenced by the increasing trend in both ratios over the years.