Sonic Automotive Inc (SAH)

Return on assets (ROA)

		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
Net income (ttm)	US$ in thousands	178,200	-51,400	-32,500	38,900	88,500	375,700	372,900	391,900	348,800	309,824	285,142	202,133	-51,400	-62,417	-93,225	-97,417	144,137	119,651	105,759	96,065
Total assets	US$ in thousands	5,364,600	5,050,300	5,081,600	5,148,000	4,978,300	4,828,300	5,023,500	5,006,200	4,975,100	3,505,960	3,656,340	3,692,230	3,746,000	3,503,920	3,595,420	3,976,740	4,071,040	4,117,890	4,119,330	4,139,090
ROA		3.32%	-1.02%	-0.64%	0.76%	1.78%	7.78%	7.42%	7.83%	7.01%	8.84%	7.80%	5.47%	-1.37%	-1.78%	-2.59%	-2.45%	3.54%	2.91%	2.57%	2.32%

December 31, 2023 calculation

ROA = Net income (ttm) ÷ Total assets
= $178,200K ÷ $5,364,600K
= 3.32%

Based on the data provided, Sonic Automotive, Inc.'s return on assets (ROA) has shown significant fluctuations over the past eight quarters. In Q4 2023, the company reported an ROA of 3.32%, indicating a strong performance, which may be attributed to effective asset utilization and profitability. However, in the preceding quarters, the ROA figures were negative (-1.02% in Q3 2023 and -0.64% in Q2 2023), suggesting that the company's assets were not generating sufficient returns to cover its expenses during those periods.

The positive ROA of 0.76% in Q1 2023 was a sign of improvement from the negative trend, but it was still below the ideal benchmark for a healthy return on assets. Looking back to Q4 2022, Sonic Automotive, Inc. achieved an ROA of 1.78%, which was notably lower than the figures from Q3 and Q2 2022, when the company reported higher ROA levels of 7.78% and 7.42%, respectively. Notably, in Q1 2022, the ROA stood at 7.83%, matching the strong performance of previous quarters.

The fluctuations in Sonic Automotive, Inc.'s ROA over the analyzed periods indicate varying levels of profitability and efficiency in utilizing its assets to generate earnings. The negative ROA figures in some quarters suggest challenges in optimizing asset performance, while the positive ROA figures indicate improvement and potential for enhanced profitability through effective asset management strategies. It is crucial for the company to focus on sustaining and improving its ROA to ensure long-term financial stability and growth.