Sonic Automotive Inc (SAH)

Days of sales outstanding (DSO)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Receivables turnover		28.70	26.96	30.07	30.78	26.17
DSO	days	12.72	13.54	12.14	11.86	13.95

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 28.70
= 12.72

To analyze Sonic Automotive Inc's Days Sales Outstanding (DSO) over the five-year period from 2020 to 2024:

1. The DSO for Sonic Automotive Inc in 2020 was 13.95 days, indicating that on average, the company took approximately 13.95 days to collect its accounts receivable.

2. In 2021, the DSO decreased to 11.86 days, suggesting an improvement in the company's collection efficiency as it took fewer days to collect outstanding sales.

3. The DSO slightly increased to 12.14 days in 2022 compared to the previous year, indicating a minor slowdown in accounts receivable collection.

4. By 2023, the DSO rose to 13.54 days, signifying a longer time taken to collect receivables compared to the previous year, which could potentially impact cash flow and liquidity.

5. In 2024, the DSO declined to 12.72 days, indicating a slight improvement in the company's collections efficiency compared to the previous year.

Overall, Sonic Automotive Inc's DSO trended downwards from 2020 to 2021, reflecting better accounts receivable management. However, there was a slight uptick in 2022 and a more significant increase in 2023 before a slight improvement in 2024. Monitoring DSO is crucial for assessing how efficiently the company collects outstanding sales and managing its cash flow effectively.