KAR Auction Services Inc (KAR)

Inventory 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
Cost of revenue (ttm)	US$ in thousands	1,004,700	965,000	929,000	881,600	867,600	864,800	858,400	847,700	834,300	955,500	1,059,000	1,180,300	1,299,900	1,302,100	1,318,700	1,220,600	1,284,800	1,354,300	1,435,500	1,617,800
Inventory	US$ in thousands	—	—	—	—	0	41,800	30,100	32,200	52,000	28,900	0	2,084,900	25,800	52,400	53,800	52,500	60,200	54,700	50,000	114,400
Inventory turnover		—	—	—	—	—	20.69	28.52	26.33	16.04	33.06	—	0.57	50.38	24.85	24.51	23.25	21.34	24.76	28.71	14.14

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,004,700K ÷ $—K
= —

Inventory turnover is a key financial ratio that indicates how efficiently a company is managing its inventory. It measures the number of times a company sells and replaces its inventory during a specific period. A high inventory turnover typically suggests strong sales and efficient inventory management, while a low turnover may indicate overstocking or slow-moving inventory.

Analyzing KAR Auction Services Inc's inventory turnover from March 31, 2020, to December 31, 2024, we observe fluctuations in the ratio over time. The inventory turnover ratio ranged from a low of 0.57 on March 31, 2022, to a high of 50.38 on December 31, 2021.

The inventory turnover saw significant variability, indicating fluctuations in the company's inventory management efficiency. The ratio peaked in December 2021, suggesting the company was effectively selling and replenishing its inventory at a rapid pace during that period. However, the sharp decline in the ratio to 0.57 on March 31, 2022, raises concerns about potential inventory management issues or a slowdown in sales.

Overall, it is essential for investors and stakeholders to closely monitor KAR Auction Services Inc's inventory turnover to assess the company's operational efficiency and inventory management practices consistently. By understanding the trends and changes in the inventory turnover ratio, stakeholders can gain insights into the company's ability to turn its inventory into sales effectively and generate revenue.