Sonic Automotive Inc (SAH)

Financial leverage ratio

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Total assets	US$ in thousands	5,895,700	5,758,200	5,804,200	5,407,600	5,364,600	5,050,300	5,081,600	5,148,000	4,978,300	4,828,300	5,023,500	5,006,200	4,975,100	3,505,960	3,656,340	3,692,230	3,746,000	3,503,920	3,595,420	3,976,740
Total stockholders’ equity	US$ in thousands	1,062,300	1,015,000	944,700	904,400	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
Financial leverage ratio		5.55	5.67	6.14	5.98	6.01	5.89	5.80	6.02	5.56	4.36	4.29	4.41	4.62	3.49	3.86	4.47	4.60	4.53	4.83	5.51

December 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $5,895,700K ÷ $1,062,300K
= 5.55

The financial leverage ratio of Sonic Automotive Inc has shown fluctuations over the periods presented. The ratio decreased from 5.51 as of March 31, 2020, to 3.49 as of September 30, 2021, indicating a decrease in financial risk and reliance on debt. However, the ratio increased again to 6.02 as of March 31, 2023, and remained relatively high around the range of 5.55 to 6.14 up to June 30, 2024.

A high financial leverage ratio suggests that the company relies more on debt financing, which can increase financial risk and impact profitability. On the other hand, a low ratio indicates a lower level of debt compared to equity, which can be favorable for financial stability.

Overall, Sonic Automotive Inc's financial leverage ratio has shown volatility, and it would be important for stakeholders to closely monitor the trend to assess the company's financial risk and leverage position effectively.