Sonic Automotive Inc (SAH)

Working capital 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
Revenue (ttm) US$ in thousands 14,235,900 13,767,300 13,925,100 14,125,400 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
Total current assets US$ in thousands 2,885,500 2,811,400 2,916,200 2,511,000 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
Total current liabilities US$ in thousands 2,637,700 2,538,500 2,651,000 2,299,700 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
Working capital turnover 57.45 50.45 52.51 66.85 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

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $14,235,900K ÷ ($2,885,500K – $2,637,700K)
= 57.45

Sonic Automotive Inc's working capital turnover has exhibited fluctuations over the period from March 31, 2020, to December 31, 2024. The working capital turnover ratio measures how efficiently the company converts its working capital into revenue.

The working capital turnover ratio for Sonic Automotive Inc ranged from a high of 419.30 on September 30, 2020, to a low of 38.54 on December 31, 2022. This indicates a significant variation in how effectively the company was utilizing its working capital to generate sales during this period.

The ratio saw periods of strong performance, such as on September 30, 2020, and September 30, 2022, where the working capital turnover exceeded 274, indicating efficient utilization of working capital. However, there were also weaker periods, as seen on December 31, 2022, when the ratio dropped significantly to 38.54, suggesting a lower level of efficiency in converting working capital into revenue.

Overall, Sonic Automotive Inc's working capital turnover ratio fluctuated throughout the period, showing both strengths and weaknesses in managing its working capital to drive sales. It is essential for the company to analyze the factors influencing these fluctuations to maintain a consistent and efficient use of working capital in the future.