KAR Auction Services Inc (KAR)
Activity ratios
Short-term
Turnover ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | — | 37.01 | 51.25 | 40.18 | 24.63 | 49.96 | 55.95 | 0.82 | 72.20 | 35.69 | 35.01 | 34.04 | 31.18 | 36.04 | 41.68 | 16.35 | 28.21 | 48.09 | 30.95 | 30.99 |
| Receivables turnover | 0.64 | 0.60 | 0.59 | 0.58 | 0.57 | 0.51 | 0.47 | 0.46 | 0.48 | 0.59 | 0.71 | 0.73 | 0.97 | 1.05 | 1.16 | 1.26 | 1.09 | 1.04 | 0.99 | 0.86 |
| Payables turnover | 2.80 | 2.39 | 2.47 | 1.89 | 2.32 | 2.24 | 2.14 | 2.05 | 2.37 | 1.75 | 1.75 | 1.60 | 2.72 | 2.10 | 2.12 | 5.28 | 2.13 | 1.56 | 0.87 | 0.75 |
| Working capital turnover | 4.53 | 3.76 | 3.66 | 3.84 | 4.01 | 3.93 | 3.25 | 1.42 | 3.79 | 2.10 | 2.56 | 2.20 | 2.37 | 1.76 | 1.96 | 3.94 | 3.83 | 3.65 | 6.87 | 4.90 |
Activity ratios provide insights into how efficiently a company manages its various assets and liabilities to generate sales and cash flow. Let's analyze the activity ratios of Openlane Inc. over the past eight quarters:
1. Receivables Turnover:
Receivables turnover measures how effectively a company collects payments from its customers. Openlane Inc.'s receivables turnover has been relatively stable, ranging from 4.04 to 5.64. A higher turnover indicates that the company is collecting receivables more frequently, which is generally favorable as it reduces the risk of bad debts and improves cash flow.
2. Payables Turnover:
Payables turnover evaluates how quickly a company pays its suppliers. Openlane Inc.'s payables turnover has also remained relatively consistent, fluctuating between 1.24 and 1.56. A higher turnover suggests that the company is managing its payments efficiently and possibly taking advantage of any available discounts.
3. Working Capital Turnover:
Working capital turnover reflects how well a company utilizes its working capital to generate sales. Openlane Inc.'s working capital turnover has shown some variation, with values ranging from 2.17 to 4.53. A higher turnover indicates that the company is efficiently deploying its resources to support its operations and drive revenue growth.
In summary, while the specific values of the activity ratios for Openlane Inc. have fluctuated over the quarters, the general trend suggests that the company is effectively managing its receivables, payables, and working capital to support its business operations and generate revenue. Maintaining stable or improving activity ratios is essential for sustaining operational efficiency and financial performance.
Average number of days
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 9.86 | 7.12 | 9.08 | 14.82 | 7.31 | 6.52 | 445.10 | 5.06 | 10.23 | 10.43 | 10.72 | 11.71 | 10.13 | 8.76 | 22.33 | 12.94 | 7.59 | 11.80 | 11.78 |
| Days of sales outstanding (DSO) | days | 571.05 | 605.44 | 617.40 | 633.44 | 640.40 | 716.63 | 772.30 | 797.38 | 763.16 | 614.82 | 514.42 | 499.81 | 376.43 | 347.37 | 315.72 | 289.82 | 335.58 | 351.69 | 369.68 | 425.58 |
| Number of days of payables | days | 130.16 | 152.49 | 148.06 | 192.90 | 157.08 | 163.21 | 170.88 | 177.94 | 153.87 | 208.90 | 208.24 | 228.35 | 133.97 | 173.69 | 172.31 | 69.16 | 171.04 | 234.03 | 421.59 | 483.66 |
Days of Inventory on Hand (DOH) for Openlane Inc. have not been provided in the data table. This ratio helps evaluate how efficiently the company manages its inventory. A lower DOH indicates that the company carries less inventory, potentially reducing storage costs and the risk of obsolete inventory.
Days of Sales Outstanding (DSO) measures how quickly the company collects its accounts receivable. Openlane Inc.'s DSO has shown fluctuations over the quarters, with values ranging from 64.74 days to 90.37 days. A lower DSO is generally preferred as it signifies that the company is able to collect receivables more quickly, improving its liquidity and cash flow.
Number of Days of Payables reflects how long it takes for the company to pay its suppliers. Openlane Inc. has experienced varying numbers of days of payables over the quarters, ranging from 234.16 days to 294.43 days. A higher number of days of payables indicates that the company is taking longer to settle its payables, which can benefit cash flow management but might strain relationships with suppliers.
Overall, monitoring these activity ratios is crucial for evaluating Openlane Inc.'s operational efficiency, financial health, and working capital management strategies. Comparing these ratios over different quarters can provide insights into the company's performance trends and potential areas that may require improvement.
Long-term
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 9.69 | 14.13 | 13.48 | 13.04 | 12.29 | 11.46 | 10.53 | 10.20 | 10.11 | 2.84 | 3.22 | 3.31 | 3.71 | 3.98 | 4.18 | 4.61 | 4.57 | 4.48 | 4.39 | 3.04 |
| Total asset turnover | 0.35 | 0.34 | 0.33 | 0.31 | 0.30 | 0.28 | 0.24 | 0.19 | 0.19 | 0.23 | 0.26 | 0.27 | 0.32 | 0.34 | 0.38 | 0.46 | 0.42 | 0.41 | 0.41 | 0.40 |
The analysis of Openlane Inc.'s long-term activity ratios reveals the following trends:
1. Fixed Asset Turnover:
- The Fixed Asset Turnover ratio measures how efficiently the company generates sales revenue from its investments in fixed assets.
- Over the past eight quarters, Openlane Inc. has consistently maintained a high Fixed Asset Turnover ratio, ranging from 9.69 to 14.34.
- This indicates that the company effectively utilizes its fixed assets to generate sales, with a peak performance in Q3 2023.
- The decreasing trend in the later quarters of 2023 may suggest a potential decrease in sales generated from fixed assets or an increase in the book value of fixed assets.
2. Total Asset Turnover:
- The Total Asset Turnover ratio reflects the company's ability to generate sales from all its assets, including fixed and current assets.
- Openlane Inc.'s Total Asset Turnover ratio has been relatively low, ranging from 0.26 to 0.35 over the same period.
- The company's efficiency in generating sales revenue from total assets has been inconsistent, with fluctuations in performance across quarters.
- The recent stability in the Total Asset Turnover ratio in Q3 and Q4 of 2023 may indicate a more steady utilization of total assets to generate sales compared to earlier quarters.
In conclusion, while Openlane Inc. has shown strong efficiency in generating sales from fixed assets, there is room for improvement in optimizing overall asset utilization to enhance its long-term activity performance.