Sonic Automotive Inc (SAH)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.26 | 0.30 | 0.34 | 0.30 | 0.17 |
| Debt-to-capital ratio | 0.59 | 0.64 | 0.65 | 0.58 | 0.44 |
| Debt-to-equity ratio | 1.42 | 1.81 | 1.87 | 1.40 | 0.80 |
| Financial leverage ratio | 5.55 | 6.01 | 5.56 | 4.62 | 4.60 |
Sonic Automotive Inc's solvency ratios indicate the company's ability to meet its long-term financial obligations.
- The Debt-to-Assets ratio has been increasing over the years, reaching 0.26 as of December 31, 2024, indicating that 26% of the company's assets are financed by debt.
- The Debt-to-Capital ratio has shown fluctuations but remained relatively stable, ranging from 0.44 to 0.59. This ratio shows that between 44% to 59% of the company's capital structure is in the form of debt.
- The Debt-to-Equity ratio has also seen fluctuations but generally increased, suggesting that the company's reliance on debt financing relative to equity has been growing. As of December 31, 2024, this ratio stood at 1.42, signifying that the company has $1.42 in debt for every $1 of equity.
- The Financial Leverage ratio has shown an increasing trend, reaching 5.55 by December 31, 2024. This ratio indicates the extent to which the company is using debt to fund its operations, with a ratio of 5.55 implying that the company has $5.55 in assets for every dollar of equity.
Overall, Sonic Automotive Inc's solvency ratios suggest a moderate level of leverage and debt in its capital structure. Investors and stakeholders should monitor these ratios to ensure the company's ability to manage its long-term debt obligations effectively.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 54.94 | 2.99 | 2.86 | 8.90 | 0.67 |
The interest coverage ratio of Sonic Automotive Inc has shown significant fluctuations over the years, ranging from a low of 0.67 in December 2020 to a high of 54.94 in December 2024.
In December 2021, the interest coverage improved markedly, reaching 8.90, indicating the company's ability to cover its interest expenses nearly nine times over with its operating income. However, this ratio dropped in the following years, landing at 2.86 in December 2022 and 2.99 in December 2023, suggesting a tighter ability to cover interest payments.
The substantial increase in the interest coverage ratio to 54.94 in December 2024 is noteworthy and signifies a substantial improvement in the company's ability to meet its interest obligations compared to the previous years.
Overall, the fluctuating trend in Sonic Automotive Inc's interest coverage ratio indicates varying levels of financial risk and potential fluctuations in the company's ability to service its debt obligations over the years.