Sonic Automotive Inc (SAH)

Cash ratio

		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
Cash and cash equivalents	US$ in thousands	28,900	34,600	119,700	160,200	229,200	139,000	327	360	299,400	220,100	239,600	77,200	170,300	125,739	115,724	181,780	29,100	2,401	2,140	2,722
Short-term investments	US$ in thousands	—	300,000	287,000	272,000	272,000	32,000	125,500	—	—	—	17	33	13	—	—	—	3	104,868	95,046	82,044
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
Cash ratio		0.01	0.17	0.20	0.21	0.27	0.10	0.07	0.00	0.16	0.15	0.15	0.04	0.09	0.08	0.07	0.09	0.01	0.06	0.05	0.04

December 31, 2023 calculation

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

Based on the data provided, Sonic Automotive, Inc.'s cash ratio has shown some fluctuations over the past eight quarters. The cash ratio measures a company's ability to cover its short-term liabilities with its available cash and cash equivalents.

In Q4 2022, the cash ratio was relatively high at 0.29, indicating that Sonic Automotive had a strong ability to cover its short-term obligations with cash on hand. However, this ratio decreased in the following quarters, reaching a low of 0.12 in Q3 2022. This significant drop may suggest a temporary strain on liquidity or a decrease in available cash during that period.

Subsequently, the cash ratio showed signs of improvement, gradually increasing to 0.23 in Q1 2023. This upward trend continued in Q2 2023 and Q3 2023, with ratios of 0.22 and 0.19, respectively. The latest data for Q4 2023 shows a slight decrease in the cash ratio to 0.18.

Overall, while there have been fluctuations in Sonic Automotive's cash ratio, the general trend indicates an improvement in the company's ability to cover its short-term liabilities with its cash reserves compared to the earlier quarters. However, it is essential to monitor this ratio regularly to ensure the company maintains a healthy level of liquidity to meet its financial obligations.