Sonic Automotive Inc (SAH)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.09 | 1.11 | 1.10 | 1.09 | 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 |
| Quick ratio | 0.20 | 0.18 | 0.45 | 0.33 | 0.39 | 0.38 | 0.40 | 0.39 | 0.52 | 0.31 | 0.25 | 0.26 | 0.42 | 0.42 | 0.36 | 0.25 | 0.30 | 0.30 | 0.30 | 0.24 |
| Cash ratio | 0.02 | 0.01 | 0.28 | 0.15 | 0.16 | 0.17 | 0.20 | 0.21 | 0.27 | 0.10 | 0.07 | 0.07 | 0.21 | 0.22 | 0.15 | 0.04 | 0.09 | 0.13 | 0.11 | 0.14 |
Sonic Automotive Inc's current ratio has been relatively stable over the years, ranging from 0.99 to 1.20. This indicates that the company has generally been able to meet its short-term obligations using its current assets, with a ratio consistently above 1, implying a healthy liquidity position.
In contrast, the quick ratio for Sonic Automotive Inc shows a wider fluctuation, starting at 0.24 in March 2020 and ranging from 0.18 to 0.52 by December 2024. This ratio focuses on more liquid assets, excluding inventories, and considers only the most liquid current assets to cover short-term liabilities. The varying quick ratios suggest changes in the composition of Sonic Automotive Inc's current assets over time.
Lastly, the cash ratio for Sonic Automotive Inc highlights a mix of trends. The ratio started at 0.14 in March 2020 and fluctuated between 0.01 and 0.28 by December 2024. The cash ratio is the most conservative liquidity measure, indicating the company's ability to cover its current liabilities with its cash and cash equivalents alone. The wide range of values suggests fluctuations in Sonic Automotive Inc's cash holdings over the period.
In summary, while Sonic Automotive Inc's current ratio reflects consistent liquidity, the fluctuations in the quick and cash ratios indicate varying levels of short-term liquidity and the need for a closer examination of the company's current asset composition and cash management strategies.
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 60.06 | 59.50 | 58.02 | 51.91 | 50.92 | 44.22 | 44.76 | 44.65 | 40.89 | 39.49 | 41.56 | 41.31 | 46.57 | 32.08 | 40.17 | 53.75 | 56.78 | 51.42 | 54.16 | 66.27 |
The cash conversion cycle of Sonic Automotive Inc has shown fluctuations over the period from March 31, 2020, to December 31, 2024.
Initially, the cash conversion cycle was relatively high at 66.27 days as of March 31, 2020, indicating a longer time taken to convert resources into cash. This decreased over the following quarters, reaching its lowest point of 32.08 days on September 30, 2021.
Subsequently, there was a gradual increase in the cash conversion cycle, potentially signaling a longer period to convert investments to cash. By December 31, 2024, the cash conversion cycle stood at 60.06 days.
Overall, fluctuations in the cash conversion cycle can reflect changes in inventory turnover, accounts receivable collection, and accounts payable management within Sonic Automotive Inc, impacting its liquidity and operational efficiency. Keeping a close eye on these trends can provide insights into the company's financial health and working capital management.