KAR Auction Services Inc (KAR)

Working capital 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
Revenue (ttm) US$ in thousands 1,751,500 1,687,800 1,655,700 1,640,800 1,645,100 1,626,600 1,603,300 1,570,600 1,519,400 1,696,000 1,838,200 2,039,400 2,251,600 2,231,800 2,290,200 2,123,800 2,187,700 2,329,400 2,437,700 2,737,800
Total current assets US$ in thousands 2,851,500 2,784,800 2,774,100 2,958,300 2,841,900 2,940,800 3,084,100 3,075,000 3,022,400 3,202,900 3,996,500 5,505,000 3,358,300 3,528,200 3,414,600 3,525,500 3,175,200 3,674,600 3,251,100 2,712,900
Total current liabilities US$ in thousands 2,565,500 2,585,300 2,576,100 2,573,700 2,478,800 2,508,700 2,646,200 2,666,400 2,643,200 2,820,400 3,547,900 4,565,600 2,975,800 2,756,700 2,683,300 2,656,000 2,250,600 2,354,500 2,009,300 2,018,800
Working capital turnover 6.12 8.46 8.36 4.27 4.53 3.76 3.66 3.84 4.01 4.43 4.10 2.17 5.89 2.89 3.13 2.44 2.37 1.76 1.96 3.94

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $1,751,500K ÷ ($2,851,500K – $2,565,500K)
= 6.12

The working capital turnover ratio for KAR Auction Services Inc has shown fluctuations over the reported periods. The ratio measures how efficiently the company utilizes its working capital to generate sales revenue. Initially, the ratio was relatively high at around 3.94 in March 31, 2020, indicating that the company efficiently turned over its working capital into revenue. However, this ratio decreased significantly in subsequent periods, reaching a low of 1.76 in September 30, 2020, and then fluctuated around the range of 1.76 to 3.13 until June 30, 2021.

From December 31, 2021, the working capital turnover ratio started to improve consistently, reaching its peak at 8.46 on September 30, 2024. This increase indicates that KAR Auction Services Inc became more efficient in utilizing its working capital to generate sales revenue during this period. However, after September 30, 2024, the ratio decreased slightly to 6.12 by December 31, 2024.

Overall, the trend in the working capital turnover ratio for KAR Auction Services Inc shows both periods of improvement and decline over the reported periods, with a notable increase in efficiency observed from December 31, 2021, to September 30, 2024. Further monitoring of the ratio will be important to assess the company's ongoing efficiency in utilizing its working capital.