Sonic Automotive Inc (SAH)

Working capital turnover

		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
Revenue (ttm)	US$ in thousands	14,233,200	14,269,000	14,074,700	13,935,600	13,908,700	13,509,270	13,147,070	13,004,340	12,345,730	11,969,180	11,445,730	10,207,390	9,729,990	9,690,070	9,853,240	10,363,490	10,454,340	10,280,200	10,048,330	9,940,000
Total current assets	US$ in thousands	2,520,400	2,241,500	2,297,300	2,301,800	2,206,300	1,757,000	2,070,900	2,060,600	2,084,100	1,471,960	1,719,370	1,780,680	1,882,600	1,652,130	1,739,100	2,129,790	2,017,610	2,022,460	2,021,180	2,023,270
Total current liabilities	US$ in thousands	2,292,900	2,009,200	2,004,400	2,057,000	1,845,400	1,718,500	1,883,100	1,869,200	1,891,700	1,428,400	1,635,800	1,781,330	1,831,400	1,629,020	1,748,180	2,013,040	2,066,160	1,945,950	1,965,410	1,966,280
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

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $14,233,200K ÷ ($2,520,400K – $2,292,900K)
= 62.56

Sonic Automotive, Inc.'s working capital turnover has shown fluctuating trends over the past eight quarters. In Q4 2023, it stood at 63.18, indicating that the company generated $63.18 in revenue for every dollar of working capital invested. This represents a slight increase from Q3 2023, where the working capital turnover was 61.89.

The working capital turnover reached its lowest point in Q4 2022 at 38.78, signifying a period of relatively lower efficiency in utilizing working capital. This was followed by a significant spike in Q3 2022, where the ratio sharply rose to 360.31, reflecting an exceptional level of revenue generation relative to working capital.

Overall, Sonic Automotive's working capital turnover ratio has demonstrated significant volatility, ranging from very low levels to exceptionally high levels. It is essential for the company to focus on maintaining a balance between efficient utilization of working capital and maximizing revenue generation to ensure sustained financial health and performance.