Sonic Automotive Inc (SAH)
Working capital turnover
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Revenue | US$ in thousands | 14,233,300 | 14,238,800 | 13,905,900 | 12,344,200 | 9,728,520 |
Total current assets | US$ in thousands | 2,885,500 | 2,520,400 | 2,206,300 | 2,084,100 | 1,882,600 |
Total current liabilities | US$ in thousands | 2,637,700 | 2,292,900 | 1,845,400 | 1,891,700 | 1,831,400 |
Working capital turnover | 57.44 | 62.59 | 38.53 | 64.16 | 190.01 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $14,233,300K ÷ ($2,885,500K – $2,637,700K)
= 57.44
Sonic Automotive Inc's working capital turnover has shown a decreasing trend over the years. The ratio was notably high at 190.01 in December 31, 2020, but has since decreased to 64.16 as of December 31, 2021, indicating that the company's working capital is being utilized less efficiently to generate sales. This trend continued as the working capital turnover further declined to 38.53 by December 31, 2022.
However, there was a slight improvement in efficiency by December 31, 2023, with the ratio increasing to 62.59, but it still remained below the initial level. By December 31, 2024, the working capital turnover stood at 57.44, signaling a modest improvement but still showing room for enhancement in utilizing working capital effectively to support sales generation. It is recommended that Sonic Automotive Inc focuses on optimizing its working capital management to potentially enhance operational efficiency and overall financial performance.
Peer comparison
Dec 31, 2024