Sonic Automotive Inc (SAH)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	14,238,800	13,905,900	12,344,200	9,728,520	10,454,300
Total current assets	US$ in thousands	2,520,400	2,206,300	2,084,100	1,882,600	2,017,610
Total current liabilities	US$ in thousands	2,292,900	1,845,400	1,891,700	1,831,400	2,066,160
Working capital turnover		62.59	38.53	64.16	190.01	—

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $14,238,800K ÷ ($2,520,400K – $2,292,900K)
= 62.59

Sonic Automotive, Inc.'s working capital turnover has fluctuated over the past five years, as evidenced by the following figures: 63.18 in 2023, 38.78 in 2022, 64.43 in 2021, 190.91 in 2020, and data unavailable for 2019. A higher working capital turnover ratio indicates that the company is efficiently using its working capital to generate sales revenue.

In 2020, Sonic Automotive, Inc. achieved a significantly high working capital turnover of 190.91, suggesting that the company was able to generate a high level of sales relative to its working capital during that year. This may indicate effective management of its current assets and liabilities to support sales activities.

On the other hand, the working capital turnover decreased to 38.78 in 2022, signaling a potential decline in efficiency in utilizing working capital to generate revenue. However, the ratio improved to 63.18 in 2023, indicating a recovery in working capital efficiency compared to the previous year.

Overall, the trend in Sonic Automotive, Inc.'s working capital turnover reflects fluctuations in the efficiency of its working capital management over the years, highlighting the importance of monitoring and analyzing this ratio to assess the company's operational performance.