Group 1 Automotive Inc (GPI)

Short-term

Turnover ratios

Based on the provided data, we can analyze Group 1 Automotive Inc's activity ratios as follows:

1. Inventory Turnover: Group 1 Automotive's inventory turnover has shown variability over the years. The ratio has decreased from 6.19 in 2020 to 6.33 in 2024, indicating a slight decrease in the efficiency of inventory management. It peaked in 2021 at 10.29 and remained relatively stable between 2022 and 2024. Overall, the company's ability to sell through its inventory improved initially but showed a slight decline in recent years.

2. Receivables Turnover: The data shows that there is no information available for the receivables turnover ratio for any of the years provided. This may suggest that Group 1 Automotive does not rely significantly on credit sales or has a negligible accounts receivable balance relative to its sales.

3. Payables Turnover: Similar to receivables turnover, there is no data provided for payables turnover, indicating a lack of information on the company's efficiency in paying its trade payables. This could be due to various reasons, including the nature of the industry or the company's payment practices.

4. Working Capital Turnover: Group 1 Automotive's working capital turnover has been fluctuating significantly over the years, ranging from 67.19 in 2020 to 253.87 in 2022. This indicates a high level of activity in utilizing its working capital to generate sales during 2022. However, there was a sharp decline in 2023 to 62.58, before rebounding to 198.35 in 2024. The company's ability to generate sales using its working capital resources has shown variability, with a notable peak in 2022.

In conclusion, Group 1 Automotive Inc's activity ratios suggest mixed performance in inventory and working capital management over the years, with fluctuations in efficiency levels. The lack of data for receivables and payables turnover ratios makes it challenging to provide a comprehensive analysis of the company's overall efficiency in managing its working capital cycle.

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Average number of days

The activity ratios for Group 1 Automotive Inc provide insights into the efficiency of the company's operations.

1. Days of Inventory on Hand (DOH):
- The DOH measures how many days, on average, inventory is held before being sold.
- In December 2020, the company held inventory for about 59 days before selling it.
- Over the next few years, there was a decreasing trend in inventory holding period, reaching 35.47 days by December 2021 and further improving to 37.35 days by December 2022.
- However, the DOH increased slightly by December 2024 to 57.65 days, indicating a longer period of inventory holding that year.

2. Days of Sales Outstanding (DSO):
- The DSO reflects the average number of days it takes for the company to collect revenue after a sale.
- The data provided does not include specific values for DSO for any of the years, indicating the unavailability of information related to accounts receivable turnover.

3. Number of Days of Payables:
- The number of days of payables indicates the average number of days it takes for the company to pay its suppliers.
- Similar to DSO, specific information on the number of days of payables is not provided, indicating the absence of data related to accounts payable turnover.

Overall, the data suggests that Group 1 Automotive Inc effectively managed its inventory in the earlier years, with a decreasing trend in the DOH. However, the increase in DOH by December 2024 may require further analysis to understand the factors contributing to the extended inventory holding period. Nonetheless, the lack of information on DSO and the number of days of payables limits a comprehensive analysis of the company's working capital management and overall efficiency in the accounts receivable and accounts payable processes.

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Long-term

Group 1 Automotive Inc's fixed asset turnover has shown a consistent upward trend over the past few years, increasing from 5.97 in 2020 to 6.06 in 2021 and further to 6.82 in 2022. This indicates that the company is generating more revenue per dollar invested in fixed assets, which is a positive sign of operational efficiency and asset utilization.

However, the data for 2023 and 2024 is unavailable, so it is unclear how the fixed asset turnover has evolved in those years. It would be important to monitor this ratio in the future to assess the company's ongoing efficiency in utilizing its fixed assets.

In terms of total asset turnover, Group 1 Automotive Inc's performance has been somewhat mixed. The ratio increased from 2.13 in 2020 to 2.34 in 2021, suggesting an improvement in the company's ability to generate sales from its total assets. However, it dipped slightly to 2.30 in 2023 and further dropped to 2.03 in 2024.

The decrease in total asset turnover from 2022 to 2024 may indicate a decline in the company's effectiveness in utilizing its total assets to generate revenue. This could be a concern for investors and stakeholders as it may signal potential inefficiencies in the company's operations or asset management strategies.

Overall, while the fixed asset turnover of Group 1 Automotive Inc has shown positive trends, the fluctuating total asset turnover warrants further investigation and monitoring to understand the underlying factors driving these changes and to assess the company's long-term operational efficiency.