KAR Auction Services Inc (KAR)

Working capital turnover

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
Revenue (ttm) US$ in thousands 1,645,100 1,626,600 1,603,300 1,570,600 1,519,400 1,504,300 1,458,400 1,450,200 1,450,600 1,622,500 1,869,000 1,912,000 2,187,700 2,329,400 2,437,700 2,737,800 2,781,900 2,704,400 2,614,900 2,519,200
Total current assets US$ in thousands 2,841,900 2,940,800 3,084,100 3,075,000 3,022,400 3,202,900 3,996,500 5,505,000 3,391,800 3,528,200 3,414,600 3,525,500 3,175,200 3,674,600 3,251,100 2,712,900 3,244,500 3,257,700 3,048,900 3,460,200
Total current liabilities US$ in thousands 2,478,800 2,508,700 2,646,200 2,666,400 2,643,200 2,820,400 3,547,900 4,481,800 3,009,300 2,756,700 2,683,300 2,656,000 2,250,600 2,354,500 2,009,300 2,018,800 2,517,700 2,516,200 2,668,400 2,945,600
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

December 31, 2023 calculation

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

Over the past eight quarters, Openlane Inc.'s working capital turnover ratio has exhibited some fluctuations. The ratio ranged between 2.17 and 4.53 during this period. Working capital turnover indicates how efficiently a company is utilizing its working capital to generate sales revenue. A higher ratio suggests that the company is effectively using its current assets to support sales activity.

Openlane Inc.'s working capital turnover reached its peak in Q4 2023 at 4.53, indicating that the company was able to generate $4.53 in sales revenue for every dollar of working capital invested. This suggests a high level of efficiency in managing its working capital during that period.

However, in Q1 2022, the working capital turnover ratio dropped to 2.17, reflecting a lower level of efficiency in utilizing working capital to generate sales. This dip could signify potential issues with managing inventory, receivables, or payables during that quarter.

Overall, Openlane Inc. should aim to maintain a consistent and optimal level of working capital turnover to ensure effective utilization of resources and maximize operational efficiency. Analyzing trends in this ratio can help identify areas for improvement in working capital management.