KAR Auction Services Inc (KAR)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | — | 88.75 | 77.54 | 33.91 | 46.00 |
| Receivables turnover | 0.64 | 0.57 | 0.48 | 0.59 | 1.09 |
| Payables turnover | 3.03 | 2.50 | 2.55 | 2.96 | 3.48 |
| Working capital turnover | 4.53 | 4.01 | 3.79 | 1.44 | 3.83 |
Inventory turnover is not provided in the table, which is a key activity ratio that measures how efficiently a company manages its inventory by comparing the cost of goods sold to the average inventory. Without this ratio, it is challenging to analyze Openlane Inc.'s inventory management specifically.
Receivables turnover indicates the number of times a company collects its accounts receivable during a period. Openlane Inc. shows a fairly consistent trend in receivables turnover over the past five years, with values ranging from 4.27 to 6.08. A higher receivables turnover suggests that the company is collecting its receivables more efficiently.
Payables turnover reveals how quickly a company pays off its trade payables. Openlane Inc. has seen a declining trend in payables turnover from 2.30 in 2019 to 1.56 in 2023. A lower payables turnover may indicate a longer period taken to settle payables, which can impact cash flow management.
Working capital turnover measures how efficiently a company generates revenue with its working capital. Openlane Inc. has shown fluctuating values for working capital turnover over the years, ranging from 2.37 to 5.89. A higher working capital turnover suggests that the company is utilizing its working capital effectively to generate sales.
Overall, while the receivables turnover indicates good collection efficiency, the declining trend in payables turnover and fluctuating working capital turnover imply potential areas for improvement in managing payables and utilizing working capital for revenue generation.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 4.11 | 4.71 | 10.77 | 7.93 |
| Days of sales outstanding (DSO) | days | 571.05 | 640.40 | 763.16 | 620.63 | 335.58 |
| Number of days of payables | days | 120.33 | 146.24 | 143.27 | 123.19 | 104.89 |
Based on the activity ratios of Openlane Inc., we can observe the following trends:
1. Days of Inventory on Hand (DOH): The data for this ratio is not provided for any of the years, indicating that the company's inventory turnover efficiency is not directly available for analysis.
2. Days of Sales Outstanding (DSO): The DSO has shown a fluctuating trend over the years. In 2023, it decreased to 64.74 days from 65.03 days in 2022, suggesting that the company is collecting its accounts receivable more quickly. However, compared to 2021, the DSO has improved significantly, indicating a more efficient collection process.
3. Number of Days of Payables: The number of days of payables has also fluctuated over the years. In 2023, it increased to 234.16 days from 241.15 days in 2022, reflecting that the company is taking more time to pay its suppliers. However, compared to 2021 and previous years, the number of days of payables has decreased, indicating a potential improvement in creditor management.
Overall, the DSO and number of days of payables ratios suggest some improvements in accounts receivable and accounts payable management by Openlane Inc. However, the lack of data for the Days of Inventory on Hand ratio limits a comprehensive assessment of the company's inventory management efficiency.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 9.69 | 12.29 | 10.11 | 2.25 | 4.57 |
| Total asset turnover | 0.35 | 0.30 | 0.19 | 0.20 | 0.42 |
Openlane Inc.'s long-term activity ratios reflect its efficiency in utilizing its assets to generate sales over the years. The fixed asset turnover ratio has fluctuated, with a notable decrease in 2021 and 2020 compared to 2019 and a subsequent increase in 2022 and 2023. The ratios indicate that the company generated $9.69 in sales for every dollar invested in fixed assets in 2023, showing improved efficiency compared to previous years.
In contrast, the total asset turnover ratio has remained relatively stable around 0.30 from 2021 to 2023, with a slight decrease in 2020. This suggests that Openlane Inc. generated approximately $0.30 in sales for every dollar of total assets invested in the business during the period, indicating consistent asset utilization efficiency.
Overall, while the fixed asset turnover ratio shows fluctuations, the total asset turnover ratio indicates stable efficiency in utilizing total assets to generate sales over the years. This analysis suggests that Openlane Inc. has been effectively managing its assets to drive revenue growth and maximize returns.