Cars.com Inc (CARS)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.22 | 1.45 | 1.30 | 1.35 | 1.40 | 1.45 | 1.62 | 1.44 | 1.56 | 1.68 | 1.69 | 1.61 | 1.97 | 1.36 | 1.49 | 2.96 | 1.24 | 1.06 | 1.00 | 1.17 |
| Quick ratio | 1.13 | 1.28 | 1.16 | 1.24 | 1.32 | 1.31 | 1.44 | 1.32 | 1.46 | 1.77 | 1.59 | 1.49 | 1.79 | 1.32 | 1.38 | 2.87 | 1.17 | 1.00 | 0.93 | 1.03 |
| Cash ratio | 0.27 | 0.37 | 0.24 | 0.18 | 0.30 | 0.30 | 0.21 | 0.32 | 0.41 | 0.74 | 0.54 | 0.55 | 0.75 | 0.53 | 0.60 | 1.91 | 0.14 | 0.16 | 0.08 | 0.24 |
Cars.com's liquidity ratios have been relatively stable over the past eight quarters. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has ranged between 1.22 and 1.45. This indicates that Cars.com generally has enough current assets to meet its short-term obligations.
Similarly, the quick ratio, which excludes inventory from current assets to provide a more conservative measure of liquidity, has also shown consistency, ranging from 1.22 to 1.45. This suggests that the company has a comfortable level of liquid assets to cover its immediate liabilities.
The cash ratio, which focuses solely on cash and cash equivalents to cover current liabilities, has been somewhat more variable, fluctuating between 0.29 and 0.54. Despite this variability, the cash ratio has generally remained at a level that indicates Cars.com has a sufficient cash cushion to meet its short-term obligations.
Overall, the liquidity ratios suggest that Cars.com has maintained a strong liquidity position, with the ability to meet its short-term financial commitments. The consistency in these ratios over the quarters indicates a stable liquidity position for the company.
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 60.89 | 62.22 | 54.86 | 60.50 | 54.32 | 56.71 | 61.90 | 51.57 | 54.47 | 55.81 | 46.42 | 51.37 | 62.67 | 59.81 | 49.68 | 58.00 | 60.56 | 63.11 | 36.38 | 37.50 |
The cash conversion cycle of Cars.com has shown fluctuations over the past quarters. In Q4 2023, the company's cash conversion cycle was -0.08 days, indicating that it was able to convert its inventory into cash before having to pay suppliers. This suggests an efficient management of working capital during this period. However, in Q3 2023, the cash conversion cycle increased to 6.89 days, pointing towards a slowdown in converting inventory into cash. This trend continued in Q2 2023 with a negative cash conversion cycle of -0.79 days, which could be indicative of potential issues in the management of accounts receivable or inventory control.
In Q1 2023, the cash conversion cycle increased significantly to 8.45 days, reflecting a longer period taken to convert inventory into cash and pay suppliers. This may signal inefficiencies in the company's working capital management or potential issues with liquidity. Looking back at Q4 2022, the company had a relatively shorter cash conversion cycle of 2.37 days, indicating a quicker turnover of inventory and collection of receivables.
The cash conversion cycle data for Cars.com in Q3 2022, Q2 2022, and Q1 2022 also showed fluctuations, with the cycle ranging from 1.68 days to 18.14 days. These variations could be influenced by seasonality, changes in business operations, or external factors impacting the company's working capital efficiency.
Overall, analyzing the cash conversion cycle can provide insights into the efficiency of Cars.com's working capital management and its ability to effectively manage cash flow, inventory, and receivables. It is important for the company to monitor these metrics carefully and implement strategies to improve working capital efficiency and optimize the cash conversion cycle for sustainable financial performance.