Penske Automotive Group Inc (PAG)

Short-term

Turnover ratios

Inventory Turnover:
- The inventory turnover ratio measures how efficiently a company manages its inventory. Penske Automotive Group Inc's inventory turnover has generally shown an increasing trend from 2020 to 2022, indicating that the company is selling its inventory at a faster rate. The slight decrease in 2023 and 2024 could suggest potential issues in managing inventory levels effectively.

Receivables Turnover:
- Penske Automotive Group Inc's receivables turnover data is not provided, which makes it difficult to assess how effectively the company is collecting on credit sales. It's important to note that a higher turnover ratio indicates quicker collection of receivables, reflecting better credit management.

Payables Turnover:
- Similar to receivables turnover, the lack of payables turnover data for Penske Automotive Group Inc limits our ability to evaluate how efficiently the company is managing its payables. A higher payables turnover ratio typically suggests that the company is taking longer to pay its suppliers.

Working Capital Turnover:
- The working capital turnover ratio measures how effectively a company utilizes its working capital to generate revenue. The significant value of 1,354.47 for 2023 indicates that Penske Automotive Group Inc generated a substantial amount of revenue relative to its working capital that year. However, the lack of data for other years restricts a comprehensive analysis of the company's working capital efficiency across the years.

---

Average number of days

Based on the provided data for Penske Automotive Group Inc, the analysis of the activity ratios is as follows:

1. Days of Inventory on Hand (DOH):
- The days of inventory on hand decreased from 72.44 days as of December 31, 2020, to 54.09 days as of December 31, 2021, showing an improvement in managing inventory levels efficiently.
- However, there was a slight increase in the DOH to 55.75 days as of December 31, 2022, followed by further increases in subsequent years to 63.72 days as of December 31, 2023, and 66.57 days as of December 31, 2024.
- The increasing trend in the DOH indicates that the company may be holding onto its inventory longer, which could tie up working capital and increase carrying costs.

2. Days of Sales Outstanding (DSO):
- The data does not provide information on the days of sales outstanding for each year, suggesting that the company's accounts receivable turnover and collection efficiency are not included in the analysis.

3. Number of Days of Payables:
- Similarly, the data does not include the number of days of payables for each year, which could have provided insights into the company's payment terms and supplier relationships.

Overall, the analysis of activity ratios based on the provided data indicates a mixed performance in managing inventory levels, while lacking information on accounts receivable and accounts payable turnover for a more comprehensive evaluation of the company's operational efficiency and liquidity management.

---

Long-term

Penske Automotive Group Inc's long-term activity ratios indicate how efficiently the company utilizes its assets to generate sales.

The Fixed Asset Turnover ratio has fluctuated over the years, decreasing from 8.50 in 2020 to 5.22 in 2021, and then increasing significantly to 11.14 in 2022. The absence of data for 2023 and 2024 makes it challenging to assess the trend accurately. A higher fixed asset turnover generally indicates better utilization of fixed assets to generate revenue, which was evident in 2022 for Penske Automotive Group Inc.

Total Asset Turnover, on the other hand, has shown a more steady trend, gradually increasing from 1.54 in 2020 to 1.97 in 2022 before slightly dropping to 1.82 in 2024. This ratio measures the company's overall efficiency in using all its assets to generate sales. The slight decrease in 2024 may indicate a potentially less efficient use of assets to generate revenue compared to previous years.

Overall, while Fixed Asset Turnover saw more significant fluctuations, suggesting varying efficiency in utilizing fixed assets, Total Asset Turnover showed a more consistent but slightly declining trend. These ratios provide insights into Penske Automotive Group Inc's asset management strategies and efficiency in generating revenue over the analyzed period. Further analysis and comparison with industry benchmarks would provide a deeper understanding of the company's performance.