Cars.com Inc (CARS)

Working capital turnover

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Revenue US$ in thousands 658,830 618,556 584,954 509,647 575,908
Total current assets US$ in thousands 178,438 148,627 147,437 178,081 122,440
Total current liabilities US$ in thousands 145,748 106,012 94,290 90,368 98,806
Working capital turnover 20.15 14.51 11.01 5.81 24.37

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $658,830K ÷ ($178,438K – $145,748K)
= 20.15

The working capital turnover ratio for Cars.com has exhibited a consistent upward trend over the past five years, indicating an improvement in the company's efficiency in utilizing its working capital to generate sales revenue.

In 2023, the working capital turnover ratio stands at 21.08, a substantial increase from the previous year's ratio of 15.34. This significant enhancement suggests that Cars.com has effectively managed its working capital resources to support its sales activities and operations.

Comparing the ratio to earlier years, a notable progression is observed from 2019 to 2020, with a sharp increase from 25.67 to 6.24, followed by a steady growth trajectory in the subsequent years. This trend reflects the company's efforts to enhance its operational efficiency and streamline its working capital management processes.

Overall, the rising trend in the working capital turnover ratio for Cars.com signifies an improvement in the company's ability to convert its working capital into sales, indicating a positive outlook for its financial performance and operational effectiveness.