Sonic Automotive Inc (SAH)

Payables turnover

		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
Cost of revenue (ttm)	US$ in thousands	13,767,600	13,483,800	13,612,900	13,842,200	13,949,700	14,201,700	13,993,900	13,770,700	13,687,700	12,980,230	12,628,430	12,463,850	11,861,000	11,525,890	11,030,600	9,902,120	9,733,100	9,394,900	9,258,700	9,433,130
Payables	US$ in thousands	172,000	148,500	219,800	143,900	149,800	143,000	131,100	148,600	138,400	139,100	134,600	124,200	133,300	105,181	146,634	136,314	105,100	92,624	105,784	78,394
Payables turnover		80.04	90.80	61.93	96.19	93.12	99.31	106.74	92.67	98.90	93.32	93.82	100.35	88.98	109.58	75.23	72.64	92.61	101.43	87.52	120.33

December 31, 2024 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $13,767,600K ÷ $172,000K
= 80.04

The payables turnover ratio of Sonic Automotive Inc has displayed fluctuations over the periods provided. The ratio indicates how efficiently the company is managing its trade payables. A higher turnover ratio suggests that the company is paying its suppliers more frequently or pays them faster.

From March 31, 2020, to June 30, 2020, there was a decrease in the payables turnover ratio from 120.33 to 87.52, indicating a slower rate of paying suppliers during this period. The ratio improved in the subsequent quarters, reaching a peak of 109.58 on September 30, 2021. This improvement suggests better management of trade payables during that period compared to the earlier periods.

However, from June 30, 2022, to June 30, 2024, there was a decline in the payables turnover ratio, with the lowest ratio recorded on June 30, 2024, at 61.93. This low ratio may indicate a longer payment period for suppliers or inefficiencies in managing the payables.

Overall, Sonic Automotive Inc's payables turnover ratio has shown variability, with periods of improvement in managing trade payables and periods of potential inefficiencies. It is essential for the company to closely monitor and optimize this ratio to ensure effective cash flow management and relationships with suppliers.