Sonic Automotive Inc (SAH)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	28,900	229,200	299,400	170,300	29,100
Short-term investments	US$ in thousands	—	272,000	99,800	13	3
Total current liabilities	US$ in thousands	2,292,900	1,845,400	1,891,700	1,831,400	2,066,160
Cash ratio		0.01	0.27	0.21	0.09	0.01

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($28,900K + $—K) ÷ $2,292,900K
= 0.01

The cash ratio of Sonic Automotive, Inc. has shown fluctuations over the past five years, ranging from 0.02 to 0.29. The ratio indicates the company's ability to cover its short-term liabilities with its available cash and cash equivalents.

At the end of 2023, the cash ratio stood at 0.18, showing a decrease from the previous year's 0.29. This suggests that the company may have reduced its cash reserves relative to its current liabilities, which could indicate a potential liquidity strain.

In comparison to 2022 and 2021, the cash ratio of 0.18 in 2023 is closer to the 2021 level of 0.22. This indicates that the company's liquidity position has somewhat stabilized but remains below the peak in 2022.

The significant increase in the cash ratio from 0.02 in 2019 to 0.29 in 2022 reflects an improvement in the company's liquidity position over those years. However, the decrease in 2023 raises concerns about the management of cash resources relative to current liabilities.

Overall, Sonic Automotive, Inc.'s cash ratio trend suggests varying levels of liquidity management over the years, and investors and analysts may want to further investigate the reasons behind the fluctuations to assess the company's ability to meet its short-term financial obligations.