CarMax Inc (KMX)

Short-term

Turnover ratios

CarMax Inc's inventory turnover has shown a positive trend over the years, increasing from 5.25 in February 2021 to 6.48 in February 2024. This indicates that CarMax is effectively managing its inventory levels and converting them into sales.

On the other hand, the data provided does not include information on the receivables turnover and payables turnover ratios for any of the years, which limits the analysis of CarMax's efficiency in collecting receivables and managing payables.

In terms of working capital turnover, CarMax has shown fluctuations in its efficiency in utilizing working capital, with a peak of 9.57 in February 2023. A higher working capital turnover ratio indicates that the company is efficiently using its working capital to generate sales.

Overall, while CarMax Inc seems to be effectively managing its inventory turnover and working capital turnover, the lack of data on receivables and payables turnover ratios hinders a comprehensive analysis of its overall activity ratios.

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Average number of days

Based on the provided data on CarMax Inc's activity ratios, we can analyze the following:

1. Days of Inventory on Hand (DOH):
- CarMax Inc's DOH decreased from 69.54 days on February 28, 2021, to 65.37 days on February 28, 2022, indicating better inventory management.
- The DOH further decreased to 50.59 days on February 28, 2023, showing a more efficient management of inventory.
- However, on February 29, 2024, the DOH slightly increased to 56.35 days, suggesting a potential buildup of inventory.
- There is missing data for February 28, 2025, which makes it difficult to assess the trend for that period.

2. Days of Sales Outstanding (DSO):
- Data is not provided for DSO for any of the years, which limits our ability to evaluate CarMax Inc's efficiency in collecting accounts receivable.

3. Number of Days of Payables:
- Similar to DSO, there is no data available for the number of days of payables for any of the years, making it challenging to assess CarMax Inc's payment practices and relationships with suppliers.

In summary, based on the available information, CarMax Inc has shown improvements in its inventory management efficiency over the years. However, the lack of data on DSO and payables hinders a comprehensive analysis of the company's overall activity ratios. Additional information would be needed to provide a more complete assessment of CarMax Inc's operational performance.

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Long-term

Based on the provided data for CarMax Inc's long-term activity ratios, we can see that the company's fixed asset turnover has shown a positive trend from 6.20 in February 28, 2021, to 8.65 in February 28, 2023. This indicates that CarMax is generating more revenue per dollar of fixed assets invested over the years, which is a positive sign of efficiency in utilizing its fixed assets.

However, it is important to note that the data for February 29, 2024, and February 28, 2025, are not available ("—"), so there is a gap in the trend analysis for these years. It would be beneficial to have complete data for a more comprehensive assessment.

Moving on to the total asset turnover ratio, we can observe a fluctuating trend. The ratio increased from 0.88 in February 28, 2021, to 1.21 in February 28, 2022, indicating that CarMax was able to generate more revenue per dollar of total assets in 2022. However, the ratio decreased to 1.13 in February 28, 2023, and further dropped to 0.98 in February 29, 2024. The significant spike to 29.86 in February 28, 2025, appears to be an anomaly or data error, as it is not in line with typical industry ratios.

In summary, while the fixed asset turnover ratio shows an improving trend in efficiency, the total asset turnover ratio presents a mixed performance with fluctuations. It is essential for CarMax to monitor these ratios consistently to ensure optimal asset utilization and sustainable growth.