Key Performance Metrics
❖ The review of Net Profit Margin witnessed a declining trend. The Net Profit Margin declined from 4.64% in 2019 to 1.56% in 2023.
❖ The average EBIT Margin for the period under analysis was 5.14%, with 2022 and 2018 performing the worst and best, respectively.
❖ In the current year, Carmax was able to cover its interest liabilities 6.40 times in the current year–compared to 2018 when it was 15.68 times.
❖ The Asset turnover stood at 1.19 times in 2023 from 1.00 in 2019, implying a low performance on capital of the business in relation to revenue.

Profitability
❖ The revenue of Carmax has fluctuated year on year. The revenue increased by 11.09% between 2019 and 2020 and a further negative of 6.22% decrease was recorded between 2021 and 2022.
There also occurred a decrease of a negative 6.24% between 2022 and 2023 (the current period).
❖ Carmax’s performance in profitability looks good as the return on capital employed also recorded good performance during the period of analysis.

Liquidity
❖ The company’s result in liquidity looks strong, as current ratio decreased from 3.20:1 to 2.60:1 on
the last year. Which implies that the company does not have enough assets to settle its current liabilities.

Capital Structure
❖ Carmax is both equity and debt financed.
❖ The debt–to–equity (D/E) ratio has been falling year on year. The gearing position of the company appears to be high as it stood at 322% in the current year

Source: Carmax Annual Report