Group 1 Automotive Inc (GPI)

Working capital turnover

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Revenue (ttm) US$ in thousands 19,934,500 18,868,300 18,352,000 18,214,200 17,873,700 17,462,600 16,920,900 16,507,600 16,222,000 15,642,700 14,988,500 14,543,600 13,709,200 13,209,800 12,740,300 11,171,200 10,852,000 10,973,200 11,051,800 11,926,190
Total current assets US$ in thousands 3,497,300 3,625,700 3,170,700 2,834,800 2,791,300 1,775,200 2,348,900 2,097,700 1,985,300 1,695,100 1,676,300 1,647,500 1,666,200 1,570,800 1,689,800 1,911,200 2,004,200 1,916,600 1,834,600 2,399,300
Total current liabilities US$ in thousands 3,396,800 3,623,900 3,097,700 2,722,000 2,505,700 2,174,600 2,122,300 2,054,400 1,921,400 1,647,100 1,682,400 1,618,900 1,543,600 1,046,100 1,272,000 1,712,500 1,842,700 1,812,100 1,775,100 2,640,400
Working capital turnover 198.35 10,482.39 251.40 161.47 62.58 — 74.67 381.24 253.87 325.89 — 508.52 111.82 25.18 30.49 56.22 67.20 105.01 185.74 —

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $19,934,500K ÷ ($3,497,300K – $3,396,800K)
= 198.35

Group 1 Automotive Inc's working capital turnover fluctuated significantly over the period under review. The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales revenue. A higher ratio indicates a more efficient use of working capital.

From June 2020 to December 2021, the working capital turnover generally declined, indicating potential inefficiencies in utilizing working capital to generate sales. However, there was a notable increase in the ratio in March 2022 to 508.52, suggesting a significant improvement in efficiency during that period.

Subsequently, the ratio decreased again, reaching a low point in September 2024. The sharp increase in September 2024 to 10,482.39 is likely an anomaly and would require further investigation. Overall, the working capital turnover appears to be volatile, with fluctuations in efficiency in utilizing working capital to generate revenue. This trend could be a result of various factors impacting the company's operations or financial management. Further analysis and correlation with other financial metrics are recommended to better understand the underlying reasons for these fluctuations.