KAR Auction Services Inc (KAR)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | — | — | 53.83 | 50.38 | 21.34 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 6.25 | 4.53 | 4.01 | 5.89 | 2.37 |
The activity ratios of KAR Auction Services Inc over the years provide insights into the efficiency of the company's operations:
1. Inventory Turnover:
- The inventory turnover ratio measures how many times a company sells and replaces its inventory during a specific period. KAR Auction Services Inc's inventory turnover has been increasing steadily, from 21.34 in 2020 to 53.83 in 2022. This indicates that the company is managing its inventory more efficiently, possibly by selling off inventory faster or reducing excess stock levels.
2. Receivables Turnover:
- The receivables turnover ratio reflects how efficiently a company is collecting its accounts receivable. The absence of data for this ratio suggests that KAR Auction Services Inc may not have significant accounts receivable, or the information might not be available.
3. Payables Turnover:
- The payables turnover ratio evaluates how quickly a company pays its suppliers. Similar to receivables turnover, the lack of data for payables turnover implies that KAR Auction Services Inc may not heavily rely on trade credit from suppliers or that the data is not disclosed.
4. Working Capital Turnover:
- The working capital turnover ratio assesses how effectively a company utilizes its working capital to generate sales. KAR Auction Services Inc's working capital turnover has shown fluctuations, with a noticeable increase from 2020 to 2021, indicating improved efficiency in using its working capital to drive revenue growth.
Overall, the increasing trend in inventory turnover and the strong working capital turnover suggest that KAR Auction Services Inc has been managing its assets efficiently and effectively utilizing its resources to drive sales growth. The absence of data for receivables and payables turnover ratios limits a comprehensive analysis of the company's overall liquidity and creditor management efficiency.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | 6.78 | 7.24 | 17.10 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Based on the data provided, KAR Auction Services Inc's activity ratios can be analyzed as follows:
1. Days of Inventory on Hand (DOH):
- December 31, 2020: 17.10 days
- December 31, 2021: 7.24 days
- December 31, 2022: 6.78 days
- December 31, 2023: Not provided
- December 31, 2024: Not provided
The decreasing trend in the Days of Inventory on Hand from 17.10 days in 2020 to 6.78 days in 2022 indicates that the company has been managing its inventory more efficiently. A lower DOH suggests faster inventory turnover and potentially better liquidity.
2. Days of Sales Outstanding (DSO):
- December 31, 2020: Not provided
- December 31, 2021: Not provided
- December 31, 2022: Not provided
- December 31, 2023: Not provided
- December 31, 2024: Not provided
Unfortunately, data on Days of Sales Outstanding (DSO) is not available, which would have provided insights into how quickly the company is collecting its accounts receivable.
3. Number of Days of Payables:
- December 31, 2020: Not provided
- December 31, 2021: Not provided
- December 31, 2022: Not provided
- December 31, 2023: Not provided
- December 31, 2024: Not provided
Data on the Number of Days of Payables is unavailable, so it is not possible to evaluate how long the company takes to pay its suppliers.
In conclusion, the decreasing trend in Days of Inventory on Hand for KAR Auction Services Inc indicates improved inventory management efficiency. However, without data on Days of Sales Outstanding and Number of Days of Payables, a comprehensive analysis of the company's entire operating cycle efficiency is not possible.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 12.29 | 2.49 | 3.71 |
| Total asset turnover | 0.39 | 0.35 | 0.30 | 0.30 | 0.32 |
The fixed asset turnover ratio for KAR Auction Services Inc has shown fluctuations over the years. The ratio decreased from 3.71 in 2020 to 2.49 in 2021, indicating a decrease in the efficiency of generating revenue from fixed assets. However, there was a significant improvement in 2022, with the ratio jumping to 12.29, possibly suggesting better utilization of fixed assets to generate revenue. Unfortunately, the data is not available for 2023 and 2024, which limits the ability to assess the trend in subsequent years.
In terms of total asset turnover, the company's performance remained relatively stable as the ratio hovered around 0.30 in 2020, 2021, and 2022. There was a slight increase in the ratio to 0.35 in 2023 and a further improvement to 0.39 in 2024. This indicates that KAR Auction Services Inc has been able to generate more revenue relative to its total assets in the later years, possibly through effective asset management or increased operational efficiency.
Overall, while the fixed asset turnover ratio exhibited more variability, the total asset turnover ratio remained relatively steady and showed a positive trend in recent years, reflecting potential improvements in the company's asset utilization and operational performance.