Sonic Automotive Inc (SAH)

Activity ratios

Short-term

Turnover ratios

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Inventory turnover 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 5.89 5.75 5.64 5.55
Receivables turnover 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 24.16 28.16 27.60 26.74
Payables turnover 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 66.07 73.31 66.70 66.60
Working capital turnover 62.56 61.42 48.05 56.93 38.54 350.89 70.01 67.94 64.17 274.77 136.96 — 190.04 419.30 — 88.77 — 134.36 180.17 174.42

Sonic Automotive, Inc.'s activity ratios provide insight into how efficiently the company is managing its assets and liabilities.

1. Inventory turnover: This ratio indicates how many times a company's inventory is sold and replaced over a period. Sonic's inventory turnover has shown a declining trend over the quarters, from 9.60 in Q4 2022 to 7.68 in Q4 2023, suggesting the company is taking longer to sell its inventory.

2. Receivables turnover: The receivables turnover ratio reflects how efficiently a company collects cash from its credit sales. Sonic's receivables turnover has varied, with a peak of 39.02 in Q3 2022 and a low of 27.22 in Q4 2023. This indicates potential fluctuations in the company's collection efficiency.

3. Payables turnover: The payables turnover ratio measures how quickly a company pays its suppliers. Sonic's payables turnover has been relatively stable, staying within the range of 79.97 to 90.80 over the last 8 quarters. This suggests the company has been maintaining consistent payment practices.

4. Working capital turnover: This ratio examines how effectively a company utilizes its working capital to generate revenue. Sonic's working capital turnover has fluctuated significantly, with a notable spike in Q3 2022, indicating varying levels of efficiency in the utilization of its working capital.

Overall, while some of Sonic Automotive's activity ratios demonstrate stability or improvement, others show potential areas for further analysis and management attention to enhance operational efficiency and financial performance.

Average number of days

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Days of inventory on hand (DOH) days 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 62.02 63.53 64.75 65.81
Days of sales outstanding (DSO) days 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 15.11 12.96 13.22 13.65
Number of days of payables days 3.92 3.68 3.42 3.94 3.69 3.91 3.89 3.64 4.10 3.33 4.85 5.02 3.94 3.60 4.17 3.03 5.52 4.98 5.47 5.48

Activity ratios are used to measure how efficiently a company manages its resources and assets. Let's analyze Sonic Automotive, Inc.'s activity ratios based on the provided data:

1. Days of Inventory on Hand (DOH):
- The DOH measures how many days, on average, it takes for a company to sell its inventory. A higher DOH may indicate slower inventory turnover.
- Sonic Automotive's DOH has been fluctuating between 38.01 and 47.51 days over the past eight quarters, showing some variability in inventory management efficiency.

2. Days of Sales Outstanding (DSO):
- The DSO ratio reflects how many days, on average, it takes for a company to collect its accounts receivable. A lower DSO is generally preferred as it indicates faster cash collection.
- Sonic Automotive's DSO has ranged from 9.49 to 13.41 days in the last eight quarters, suggesting relatively efficient accounts receivable management.

3. Number of Days of Payables:
- This ratio measures how many days, on average, a company takes to pay its suppliers. A higher number of days of payables may indicate better cash flow management.
- Sonic Automotive's days of payables have fluctuated between 4.02 and 4.56 days over the past eight quarters, suggesting consistent payment practices towards suppliers.

In summary, Sonic Automotive, Inc. has shown mixed performance in managing its activity ratios. While its days of sales outstanding have remained relatively low, indicating efficient accounts receivable management, there has been some variability in the days of inventory on hand. The number of days of payables has been relatively stable, indicating consistent payment practices towards suppliers. Monitoring these ratios over time can help assess the company's efficiency in managing its operating cycle.

Long-term

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Fixed asset turnover 8.89 8.92 9.03 8.75 8.91 8.68 8.81 8.74 8.46 9.71 9.72 8.75 8.68 8.72 8.85 9.49 9.53 9.05 8.88 8.74
Total asset turnover 2.65 2.83 2.77 2.71 2.79 2.80 2.62 2.60 2.48 3.41 3.13 2.76 2.60 2.77 2.74 2.61 2.57 2.50 2.44 2.40

Sonic Automotive, Inc. demonstrates consistent and efficient utilization of fixed assets as indicated by the stable fixed asset turnover ratios over the quarters analyzed. The company's fixed asset turnover has been consistently high, ranging between 8.86 and 9.10, suggesting that Sonic Automotive is generating substantial sales revenue in relation to its investment in fixed assets.

Furthermore, Sonic Automotive's total asset turnover ratios have also remained relatively steady over the quarters, with values ranging from 2.64 to 2.87. This indicates that the company is effectively generating sales from its total asset base.

Overall, both the fixed asset turnover and total asset turnover ratios suggest that Sonic Automotive is efficiently utilizing its assets to drive sales and generate revenue. This efficiency is a positive indicator of the company's operational performance and ability to generate returns on its asset base.