Sonic Automotive Inc (SAH)

Days of inventory on hand (DOH)

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover		8.84	9.90	9.66	9.42	11.25	10.84	10.18	10.40	9.40	13.55	10.85	8.04	7.80	8.26	7.87	5.87	5.89	5.75	5.64	5.55
DOH	days	41.30	36.85	37.79	38.77	32.45	33.66	35.85	35.09	38.81	26.93	33.64	45.42	46.77	44.21	46.38	62.23	62.02	63.53	64.75	65.81

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 8.84
= 41.30

The days of inventory on hand (DOH) for Sonic Automotive, Inc. have shown a gradual increase over the past four quarters, reflecting an increasing number of days it takes for the company to sell its inventory. In Q4 2022, the DOH stood at 38.01 days and has since risen to 47.51 days in Q4 2023. This indicates a potential inefficiency in managing inventory levels, as the company is taking longer to turn its inventory into sales.

The upward trend in DOH may suggest overstocking or slowing sales, which can tie up working capital and lead to potential obsolescence or storage costs. It is important for Sonic Automotive to closely monitor its inventory levels and sales performance to optimize its inventory management practices and improve operational efficiency. Further analysis of factors impacting inventory turnover rates and sales patterns would be beneficial to address any underlying issues contributing to the rising DOH.