Sonic Automotive Inc (SAH)

Days of sales outstanding (DSO)

		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
Receivables turnover		28.71	31.53	31.56	33.58	26.95	33.07	35.13	37.18	30.08	37.46	38.01	37.00	30.78	43.05	32.07	27.33	26.18	33.77	30.53	51.59
DSO	days	12.71	11.58	11.56	10.87	13.54	11.04	10.39	9.82	12.13	9.74	9.60	9.87	11.86	8.48	11.38	13.36	13.94	10.81	11.95	7.07

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 28.71
= 12.71

Days Sales Outstanding (DSO) is a key measure of how efficiently Sonic Automotive Inc is collecting its accounts receivable. Lower DSO values indicate that the company is collecting payments from customers more quickly.

Analyzing the trend of DSO for Sonic Automotive Inc from March 31, 2020, to December 31, 2024, we observe fluctuations in the values. The DSO values ranged from a low of 7.07 days on March 31, 2020, to a high of 13.94 days on December 31, 2020. Subsequently, there was a decrease in DSO to 8.48 days on September 30, 2021, before rising again to 13.54 days on December 31, 2023.

The company managed to reduce its DSO to 9.60 days on June 30, 2022, which could indicate improved efficiency in collecting receivables. However, this progress was not sustained as the DSO increased to 12.71 days on December 31, 2024.

It is essential for Sonic Automotive Inc to closely monitor its DSO and strive to keep it at optimal levels to ensure efficient cash flow and liquidity. Fluctuations in DSO could be indicative of changes in the company's credit policies, customer payment behavior, or internal collection processes. Further analysis and comparisons with industry benchmarks may provide insights into the effectiveness of Sonic Automotive Inc's accounts receivable management.