Sonic Automotive Inc (SAH)

Current 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
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
Current ratio		1.10	1.12	1.15	1.12	1.20	1.02	1.10	1.10	1.10	1.03	1.05	1.00	1.03	1.01	0.99	1.06	0.98	1.04	1.03	1.03

December 31, 2023 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $2,520,400K ÷ $2,292,900K
= 1.10

The current ratio of Sonic Automotive, Inc. has shown some fluctuations over the past quarters, ranging from 1.02 to 1.20. A current ratio measures a company's ability to cover its short-term liabilities with its short-term assets. A ratio of 1.0 or higher is generally considered acceptable, as it indicates that the company has enough current assets to meet its current liabilities.

Looking at the trend over the past eight quarters, the current ratio has generally been above 1.0, which suggests that Sonic Automotive has been able to meet its short-term obligations. However, the ratio has varied within a relatively narrow range, indicating some stability in the company's liquidity position.

The recent decrease in the current ratio from 1.15 in Q2 2023 to 1.10 in Q4 2023 may indicate that the company's current liabilities have increased relative to its current assets. This change should be monitored closely, as a declining current ratio could signal potential liquidity issues in the future.

Overall, while Sonic Automotive has maintained a current ratio above 1.0, management should continue to assess and manage the company's liquidity position to ensure it can meet its short-term financial obligations effectively.