Sonic Automotive Inc (SAH)

Days of inventory on hand (DOH)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Inventory turnover		7.03	7.03	6.97	8.14	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
DOH	days	51.90	51.94	52.35	44.84	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

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 7.03
= 51.90

The days of inventory on hand (DOH) for Sonic Automotive Inc have shown fluctuations over the reported quarters within the given time frame. The DOH metric measures how many days a company takes on average to sell its inventory.

From March 31, 2020, to September 30, 2021, Sonic Automotive Inc managed to decrease its DOH from 62.23 days to 26.93 days, indicating a significant improvement in inventory management efficiency. This trend suggests that the company was able to sell its inventory faster and reduce its holding costs during this period.

However, from December 31, 2021, to June 30, 2024, the DOH started to rise again, reaching a peak of 52.35 days by June 30, 2024. This increase may raise concerns about potential excess inventory levels or slower inventory turnover, which could tie up working capital and impact profitability.

Overall, Sonic Automotive Inc should continue monitoring its DOH closely to ensure efficient inventory management, minimize carrying costs, and maintain a healthy balance between inventory levels and sales demand.