Sonic Automotive Inc (SAH)

Debt-to-capital ratio

		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
Long-term debt	US$ in thousands	1,616,500	1,623,100	1,629,500	1,650,800	1,672,200	1,442,400	1,462,000	1,493,200	1,510,700	637,774	634,712	637,377	651,800	669,684	677,488	830,839	636,978	846,222	851,283	880,939
Total stockholders’ equity	US$ in thousands	891,900	857,500	876,700	854,800	895,200	1,106,900	1,170,000	1,135,000	1,076,400	1,005,800	946,400	826,400	814,800	774,102	744,702	721,987	944,800	902,425	875,725	852,286
Debt-to-capital ratio		0.64	0.65	0.65	0.66	0.65	0.57	0.56	0.57	0.58	0.39	0.40	0.44	0.44	0.46	0.48	0.54	0.40	0.48	0.49	0.51

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $1,616,500K ÷ ($1,616,500K + $891,900K)
= 0.64

The debt-to-capital ratio of Sonic Automotive, Inc. has been fairly stable over the past eight quarters, ranging between 0.72 to 0.80. This ratio indicates that the company relies on debt to finance a significant portion of its operations and investments, with debt comprising between 72% to 80% of the company's total capital structure.

Consistently maintaining a ratio around 0.80 suggests that Sonic Automotive has a significant level of leverage in its capital structure, which could potentially increase financial risk and interest expenses. It is important for investors and stakeholders to closely monitor the company's ability to manage this debt level and ensure that it does not lead to solvency issues or difficulties in meeting financial obligations in the future.