KAR Auction Services Inc (KAR)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	1,645,100	1,519,400	1,450,600	1,326,900	2,781,900
Total current assets	US$ in thousands	2,841,900	3,022,400	3,391,800	3,175,200	3,244,500
Total current liabilities	US$ in thousands	2,478,800	2,643,200	3,009,300	2,250,600	2,517,700
Working capital turnover		4.53	4.01	3.79	1.44	3.83

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,645,100K ÷ ($2,841,900K – $2,478,800K)
= 4.53

Working capital turnover measures how effectively a company is utilizing its working capital to generate sales revenue. A higher working capital turnover ratio indicates efficient utilization of working capital in generating revenues.

Analyzing the trend of Openlane Inc.'s working capital turnover ratio over the past five years, we observe fluctuations in the ratio. In 2023, the ratio stands at 4.53, showing an improvement compared to 2022 when it was 4.01. This implies that in 2023, the company was able to generate more revenue per dollar of working capital invested, reflecting improved efficiency in managing its working capital.

Looking further back, in 2021, the working capital turnover ratio was notably higher at 5.89, suggesting a peak in efficiency in utilizing working capital to generate sales. In contrast, there was a dip in 2020 with a ratio of 2.37, indicating a decline in the effectiveness of working capital management.

Comparing the most recent ratio to 2019, where the working capital turnover was 3.83, we see a significant improvement in 2023. This upward trend may signal that Openlane Inc. has enhanced its operational efficiency and effectiveness in converting its working capital into sales revenue.

Overall, Openlane Inc.'s working capital turnover ratio has displayed varying trends over the past five years, with fluctuations reflecting changes in the company's working capital management efficiency. Continued monitoring and analysis of this ratio will be essential for evaluating the company's financial performance and operational effectiveness.