Cars.com Inc (CARS)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.83 | 1.22 | 1.40 | 1.56 | 1.97 |
| Quick ratio | 0.43 | 0.27 | 0.30 | 0.41 | 0.75 |
| Cash ratio | 0.43 | 0.27 | 0.30 | 0.41 | 0.75 |
Cars.com Inc's liquidity position, as indicated by its current ratio, has shown a decreasing trend over the years, from 1.97 in 2020 to 1.22 in 2023, before slightly improving to 1.83 in 2024. While the current ratio remained above 1 in all years, signifying that the company had more current assets than current liabilities to cover its short-term obligations, the declining trend indicates that the company may have faced challenges in managing its short-term obligations efficiently during this period.
Similarly, the quick ratio and cash ratio of Cars.com Inc also exhibited a downward trend from 2020 to 2023, indicating a decrease in the company's ability to meet its short-term liabilities using its most liquid assets. The quick ratio decreased from 0.75 in 2020 to 0.27 in 2023, reflecting a significant reduction in the company's ability to cover its immediate liabilities. The cash ratio followed a similar trend, declining from 0.75 in 2020 to 0.27 in 2023.
In 2024, there was a slight improvement in the quick and cash ratios, showing a modest recovery in the company's liquidity position. However, it is essential to closely monitor these ratios in the future to ensure that Cars.com Inc maintains a healthy liquidity position and can meet its short-term obligations effectively.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 0.00 | 20.66 | 26.60 | 24.96 | 23.33 |
The cash conversion cycle of Cars.com Inc has shown some fluctuations over the years. In December 31, 2020, the company's cash conversion cycle was 23.33 days, which increased to 24.96 days by December 31, 2021. It further rose to 26.60 days by December 31, 2022, indicating a lengthened period for the company to convert its investments in inventory and accounts receivable into cash receipts.
However, there was a significant improvement by December 31, 2023, as the cash conversion cycle decreased to 20.66 days, suggesting better efficiency in managing working capital. Notably, by December 31, 2024, the cash conversion cycle reached 0.00 days, pointing towards a situation where the company was able to convert its investments into cash instantaneously.
Overall, the trend in the cash conversion cycle of Cars.com Inc shows some variability, with improvements in efficiency demonstrated in certain years and a significant achievement of instantaneous cash conversion by the end of 2024.