Sonic Automotive Inc (SAH)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		26.96	30.07	30.78	26.17	24.16
DSO	days	13.54	12.14	11.86	13.95	15.11

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 26.96
= 13.54

The Days Sales Outstanding (DSO) ratio for Sonic Automotive, Inc. has shown a fluctuating trend over the past five years. In 2023, the DSO stood at 13.41 days, which increased from the previous year's 12.05 days. This indicates that on average, Sonic Automotive took approximately 13.41 days to collect its accounts receivable in 2023.

Comparing the DSO ratio to previous years, we observe that it had a slightly decreasing trend from 2019 to 2021, hitting its lowest at 11.81 days in 2021. However, in 2022 and 2023, there was an uptick in the DSO ratio.

The increase in DSO from 2022 to 2023 could signal potential challenges in collecting receivables efficiently, which may impact the company's cash flow and liquidity management. Monitoring and managing the DSO ratio effectively is crucial for Sonic Automotive to ensure timely collection of accounts receivable and maintain a healthy working capital position.