Cars.com Inc (CARS)

Payables turnover

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	413,278	401,104	391,906	386,302	383,866	391,548	392,524	389,879	383,829	371,444	360,465	347,932	1,261,655	1,267,192	1,737,388	1,682,018	701,717	630,977	100,149	98,330
Payables	US$ in thousands	22,259	18,703	19,888	17,424	18,230	18,622	13,212	16,810	15,420	15,738	25,394	22,891	16,512	19,896	14,404	17,626	12,431	6,280	13,466	12,131
Payables turnover		18.57	21.45	19.71	22.17	21.06	21.03	29.71	23.19	24.89	23.60	14.19	15.20	76.41	63.69	120.62	95.43	56.45	100.47	7.44	8.11

December 31, 2023 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $413,278K ÷ $22,259K
= 18.57

Payables turnover measures how efficiently a company is managing its accounts payable by comparing the cost of goods sold to its average accounts payable balance during a specific period. A higher payables turnover ratio indicates that the company is paying its suppliers more frequently, which could suggest effective cash management or good supplier relationships.

Analyzing the payables turnover figures for Cars.com from Q1 2022 to Q4 2023, we observe fluctuations in the ratio over time. In Q2 2022, there was a significant peak in the payables turnover ratio at 8.73, indicating that the company was paying its suppliers more frequently during that period. However, the ratio decreased in the following quarters, reaching a low of 5.49 in Q4 2023.

The downward trend in payables turnover from Q2 2022 to Q4 2023 suggests that Cars.com may be taking longer to pay its suppliers or managing its accounts payable less efficiently. While a declining payables turnover ratio could indicate an opportunity for the company to negotiate better payment terms with suppliers or optimize its working capital management, further investigation into the underlying reasons for these fluctuations would be necessary to make more informed conclusions about the company's financial performance and cash flow dynamics.