CarMax Inc (KMX)

Working capital turnover

		Nov 30, 2024	Aug 31, 2024	May 31, 2024	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020
Revenue (ttm)	US$ in thousands	25,976,900	25,902,070	25,962,380	26,536,040	26,631,930	26,989,350	28,060,310	29,684,870	31,649,080	33,670,880	33,514,440	31,900,420	29,377,980	26,035,160	23,418,970	18,950,150	18,748,380	18,353,470	18,182,450	20,319,990
Total current assets	US$ in thousands	4,818,640	4,859,060	4,970,310	5,226,590	5,109,950	5,386,370	5,363,670	5,041,370	4,984,020	5,872,460	6,117,970	6,549,290	5,955,070	5,371,300	4,690,600	4,116,800	3,737,100	4,327,860	3,283,730	3,663,690
Total current liabilities	US$ in thousands	2,097,290	2,155,800	1,985,900	2,312,290	2,083,240	2,320,390	2,113,970	1,938,310	1,937,050	2,132,190	2,251,750	2,047,460	2,056,850	1,958,960	2,093,390	1,698,550	1,437,790	1,598,940	1,151,010	1,534,710
Working capital turnover		9.55	9.58	8.70	9.11	8.80	8.80	8.63	9.57	10.39	9.00	8.67	7.09	7.54	7.63	9.02	7.84	8.15	6.73	8.53	9.54

November 30, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $25,976,900K ÷ ($4,818,640K – $2,097,290K)
= 9.55

Working capital turnover is a financial ratio that measures how efficiently a company is utilizing its working capital to generate sales revenue. A higher working capital turnover ratio indicates that the company is effectively managing its working capital.

Analyzing the working capital turnover of CarMax Inc from February 29, 2020, to November 30, 2024, we observe fluctuations in the ratio over the period. The ratio ranged from a low of 6.73 on August 31, 2020, to a high of 10.39 on November 30, 2022. This suggests that CarMax was able to generate revenue efficiently using its working capital during the period.

Overall, the working capital turnover ratio for CarMax remained relatively stable, with the ratio hovering around 8 to 9 for most of the period. This indicates that CarMax was able to effectively manage its working capital to support its sales activities. However, there were slight fluctuations in the ratio, reflecting changes in the company's working capital management efficiency over time.

It is important for investors and stakeholders to monitor the working capital turnover ratio as it provides insights into how well CarMax is utilizing its working capital resources to generate sales revenue. An improving trend in the ratio would indicate enhanced efficiency in working capital management, while a declining trend might signal inefficiencies that need to be addressed.