Sonic Automotive Inc (SAH)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 5,895,700 | 5,364,600 | 4,978,300 | 4,975,100 | 3,746,000 |
| Total stockholders’ equity | US$ in thousands | 1,062,300 | 891,900 | 895,200 | 1,076,400 | 814,800 |
| Financial leverage ratio | 5.55 | 6.01 | 5.56 | 4.62 | 4.60 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $5,895,700K ÷ $1,062,300K
= 5.55
To analyze Sonic Automotive Inc's financial leverage ratio over the past five years, we observe an increasing trend from 4.60 in 2020 to 5.55 in 2024. This indicates that the company has been relying more on debt financing compared to equity financing during this period. A higher financial leverage ratio suggests that a larger portion of the company's assets are funded through debt, which can magnify returns in times of growth but also increase financial risk during economic downturns. It is important for investors and stakeholders to monitor this ratio to assess Sonic Automotive Inc's ability to meet its debt obligations and manage financial risk effectively.
Peer comparison
Dec 31, 2024