Sonic Automotive Inc (SAH)

Debt-to-assets ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Long-term debt	US$ in thousands	1,616,500	1,672,200	1,510,700	651,800	636,978
Total assets	US$ in thousands	5,364,600	4,978,300	4,975,100	3,746,000	4,071,040
Debt-to-assets ratio		0.30	0.34	0.30	0.17	0.16

December 31, 2023 calculation

Debt-to-assets ratio = Long-term debt ÷ Total assets
= $1,616,500K ÷ $5,364,600K
= 0.30

The debt-to-assets ratio of Sonic Automotive, Inc. has shown an increasing trend over the past five years, indicating a higher reliance on debt financing relative to its total assets.

In 2023, the ratio stands at 0.67, which means that 67% of the company's assets are financed by debt. This represents a slight increase from the previous year where the ratio was 0.65. The upward trajectory suggests that the company has been taking on more debt compared to its total assets.

Comparing the latest ratio to 2021 and 2020, we observe a consistent increase over the years. In 2021, the ratio was 0.61, and in 2020, it was 0.56. This indicates a progressive shift towards higher debt levels relative to the company's asset base.

However, it is worth noting that the debt-to-assets ratio has remained stable since 2022 when it was also at 0.65. This suggests that while the company's debt levels have been increasing, there has been some consistency in the proportion of assets financed by debt over the past two years.

Overall, the increasing trend in Sonic Automotive's debt-to-assets ratio may indicate a higher financial risk due to a greater reliance on debt financing. Investors and stakeholders may want to monitor the company's ability to manage its debt levels effectively and ensure sustainable financial stability in the long run.