Sonic Automotive Inc (SAH)

Debt-to-equity 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-equity ratio		1.81	1.89	1.86	1.93	1.87	1.30	1.25	1.32	1.40	0.63	0.67	0.77	0.80	0.87	0.91	1.15	0.67	0.94	0.97	1.03

December 31, 2023 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $1,616,500K ÷ $891,900K
= 1.81

Sonic Automotive, Inc.'s debt-to-equity ratio has exhibited fluctuating trends over the observed periods. The ratio increased from 2.60 in Q1 2022 to 4.01 in Q1 2023, indicating a higher reliance on debt compared to shareholder equity during this time. However, in Q2 and Q3 of 2022, there was a slight decrease in the ratio, suggesting a temporary improvement in the company's debt management.

Notably, the ratio surged to 4.05 in Q4 2023, which signifies a significant increase in debt relative to equity. This could potentially indicate higher financial risk for the company, as a higher debt-to-equity ratio may imply increased financial leverage.

Overall, Sonic Automotive, Inc.'s debt-to-equity ratio has shown a somewhat erratic pattern, indicating varying levels of debt utilization to finance its operations and investments. It would be essential for stakeholders to further investigate the reasons behind these fluctuations and assess the company's overall financial health and risk profile.