Group 1 Automotive Inc (GPI)

Working capital turnover

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Revenue US$ in thousands 17,760,600 16,137,600 13,416,000 10,768,700 11,964,300
Total current assets US$ in thousands 2,791,300 1,985,300 1,666,200 2,004,200 2,516,300
Total current liabilities US$ in thousands 2,505,700 1,921,400 1,543,600 1,842,700 2,422,300
Working capital turnover 62.19 252.54 109.43 66.68 127.28

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $17,760,600K ÷ ($2,791,300K – $2,505,700K)
= 62.19

Working capital turnover is a financial ratio that measures how efficiently a company is utilizing its working capital to generate revenue. A higher working capital turnover indicates better efficiency in managing working capital.

The working capital turnover for Group 1 Automotive, Inc. has fluctuated over the past five years, as evidenced by the values of 62.56 in 2023, 254.66 in 2022, 109.97 in 2021, 67.15 in 2020, and 127.99 in 2019. A significant increase in working capital turnover, such as the spike from 67.15 in 2020 to 254.66 in 2022, suggests that the company has improved its ability to convert working capital into sales.

However, it is important to note that the working capital turnover ratio can be influenced by various factors, such as changes in inventory management practices, accounts receivable collection efficiency, and accounts payable terms. Therefore, it is crucial for investors and analysts to analyze the company's financial statements comprehensively and consider other performance metrics to gain a holistic understanding of the company's operational efficiency and financial health.