Sonic Automotive Inc (SAH)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	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
Receivables	US$ in thousands	528,100	462,400	401,100	371,700	432,742
Total current liabilities	US$ in thousands	2,292,900	1,845,400	1,891,700	1,831,400	2,066,160
Quick ratio		0.24	0.52	0.42	0.30	0.22

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($28,900K + $—K + $528,100K) ÷ $2,292,900K
= 0.24

The quick ratio of Sonic Automotive, Inc. has exhibited some fluctuations over the past five years. The quick ratio measures the company's ability to meet its short-term obligations with its most liquid assets. A quick ratio below 1 indicates that the company may have difficulty meeting its short-term liabilities.

In 2023, the quick ratio of Sonic Automotive, Inc. was 0.41, showing a decrease from the previous year's ratio of 0.54. This decline could suggest a potential weakening in the company's short-term liquidity position compared to the prior year.

Comparing the quick ratio of 2023 to the ratios of the preceding years, it can be observed that the quick ratio has generally been below the ideal threshold of 1. This indicates that Sonic Automotive, Inc. may have faced challenges in quickly converting its current assets into cash to cover its short-term obligations.

Further analysis of the components of the quick ratio, such as current assets and current liabilities, would provide more insights into the company's liquidity management and working capital efficiency. Additionally, it would be beneficial for stakeholders to monitor Sonic Automotive, Inc.'s liquidity position closely to assess its ability to manage short-term financial obligations effectively.