Cars.com Inc (CARS)

Short-term

Turnover ratios

Inventory Turnover Ratio:

- The inventory turnover ratio indicates how efficiently Cars.com Inc is managing its inventory.
- Over the period from March 31, 2020, to December 31, 2024, the company's inventory turnover ranged from 8.88 to 15.64.
- The highest inventory turnover was seen on December 31, 2020, at 15.64, implying that Cars.com Inc sold its inventory 15.64 times during that year.
- A higher inventory turnover generally indicates that the company is selling its products quickly and efficiently.
- The variability in the inventory turnover ratio over the years may suggest changes in sales patterns or inventory management strategies at Cars.com Inc.

Receivables Turnover Ratio:

- Receivables turnover ratio was not available for analysis during the provided period.
- The receivables turnover ratio provides insight into how efficiently a company is collecting its outstanding receivables.
- The absence of data on this ratio makes it challenging to evaluate Cars.com Inc's effectiveness in collecting cash from its credit customers.

Payables Turnover Ratio:

- Payables turnover ratio was not available for analysis during the provided period.
- The payables turnover ratio helps in assessing how quickly a company pays its suppliers.
- The lack of data on this ratio limits our ability to assess Cars.com Inc's payment practices towards its suppliers.

Working Capital Turnover Ratio:

- The working capital turnover ratio indicates how efficiently a company is utilizing its working capital to generate sales.
- Cars.com Inc's working capital turnover ratio ranged from 6.24 to 21.08 during the period analyzed.
- The highest ratio was observed on December 31, 2023, at 21.08, suggesting that the company generated $21.08 in sales for every dollar of working capital invested.
- A higher working capital turnover ratio generally signifies more effective utilization of resources to generate revenues.

In conclusion, the analysis of Cars.com Inc's activity ratios reveals varying levels of efficiency in managing inventory and working capital over the years, while data gaps limit our insights into the receivables and payables turnover.

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Average number of days

Based on the provided data on activity ratios for Cars.com Inc, we observe the following trends:

1. Days of Inventory on Hand (DOH):
- The DOH ratio fluctuated over the past years, ranging from a low of 23.33 days on December 31, 2020, to a high of 41.12 days on September 30, 2023.
- The company managed its inventory efficiently, with a gradual increase in DOH in recent periods, indicating a longer duration of inventory turnover.
- The last available data point shows a DOH of 37.49 days on December 31, 2023, suggesting a moderate level of inventory on hand.

2. Days of Sales Outstanding (DSO):
- Unfortunately, there is no data available for DSO, which typically measures the average number of days it takes a company to collect revenue after a sale is made.
- Without this data, it is challenging to assess the company's efficiency in collecting its accounts receivable and managing its cash flows effectively.

3. Number of Days of Payables:
- Similar to DSO, there is no data provided for the number of days of payables, which would show the average number of days a company takes to pay its suppliers.
- This ratio is crucial in evaluating the company's liquidity position and its relationship with its suppliers.

In conclusion, while the information on the Days of Inventory on Hand provides some insights into Cars.com Inc's inventory management, the lack of data for Days of Sales Outstanding and Number of Days of Payables limits a comprehensive analysis of the company's activity ratios related to accounts receivable and accounts payable.

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Long-term

Based on the provided data for Cars.com Inc, we can analyze the long-term activity ratios as follows:

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how efficiently the company is using its fixed assets to generate sales. A higher ratio indicates better utilization of fixed assets.
- From March 31, 2020, to December 31, 2024, the fixed asset turnover ratio for Cars.com Inc generally increased steadily from 9.96 to 14.46, with some minor fluctuations along the way.
- The company's fixed asset turnover ratio reached its peak at 15.40 on September 30, 2023, indicating that the company was efficient in generating revenue from its fixed assets during that period.

2. Total Asset Turnover:
- The total asset turnover ratio measures how efficiently a company is using its total assets to generate revenue. A higher ratio suggests better asset utilization.
- Over the period from March 31, 2020, to December 31, 2024, the total asset turnover ratio for Cars.com Inc showed some fluctuations but generally trended upwards.
- It increased from 0.48 on March 31, 2020, to 0.65 on December 31, 2024. This indicates that the company was able to generate more revenue for each dollar of assets during the period under review.

In summary, based on the data provided, Cars.com Inc demonstrated an improvement in both its fixed asset turnover and total asset turnover ratios over the long term. These increases suggest that the company effectively utilized its fixed and total assets to generate revenue, indicating operational efficiency and effective management of assets.