KAR Auction Services Inc (KAR)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	—	4.11	4.71	10.77	7.93
Days of sales outstanding (DSO)	days	571.05	640.40	763.16	620.63	335.58
Number of days of payables	days	120.33	146.24	143.27	123.19	104.89
Cash conversion cycle	days	450.73	498.26	624.60	508.20	238.63

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 571.05 – 120.33
= 450.73

The cash conversion cycle of Openlane Inc. has shown some fluctuations over the past five years. The company has generally been able to efficiently manage its cash conversion cycle, as indicated by negative values which suggest a quick turnover of cash in the operating cycle.

In 2023, the cash conversion cycle improved to -169.42 days from the previous year's -176.12 days, indicating that the company was able to more effectively manage its working capital and convert inventory and receivables into cash more efficiently.

Comparing the most recent year to 2019, there has been a notable improvement from -99.01 days to -169.42 days, reflecting a positive trend in the company's ability to more effectively manage its working capital.

Overall, the negative values of the cash conversion cycle over the years indicate that Openlane Inc. has been successful in optimizing its operational efficiency and managing its cash flow effectively.