Sonic Automotive Inc (SAH)

Solvency ratios

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
Debt-to-assets ratio 0.26 0.27 0.28 0.29 0.30 0.32 0.32 0.32 0.34 0.30 0.29 0.30 0.30 0.18 0.17 0.17 0.17 0.19 0.19 0.21
Debt-to-capital ratio 0.59 0.61 0.63 0.64 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
Debt-to-equity ratio 1.42 1.55 1.70 1.75 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
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

Sonic Automotive Inc's solvency ratios provide insights into the company's ability to meet its long-term financial obligations. The Debt-to-Assets ratio gradually increased from 0.21 in March 2020 to 0.26 in December 2024, indicating a greater proportion of the company's assets were financed by debt over the period.

The Debt-to-Capital ratio saw fluctuations but displayed an overall increasing trend, rising from 0.54 in March 2020 to 0.59 in December 2024. This suggests that the company relied more on debt financing compared to capital, potentially increasing financial risk.

The Debt-to-Equity ratio also increased systematically from 1.15 in March 2020 to 1.42 in December 2024. This indicates a surge in the company's leverage and financial risk as debt levels rose relative to equity.

The Financial Leverage ratio, which reflects the proportion of debt in the company's capital structure, showed an escalating pattern from 5.51 in March 2020 to 5.55 in December 2024. The increasing trend suggests a growing reliance on debt to fund operations and investments.

Overall, Sonic Automotive Inc's solvency ratios indicate an increasing dependency on debt financing over the years, which may raise concerns about the company's long-term financial stability and ability to manage debt obligations effectively.

Coverage ratios

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
Interest coverage 79.57 3.06 3.25 3.05 3.06 1.38 1.54 2.31 2.93 6.57 7.34 8.67 9.13 10.97 9.81 7.24 0.69 0.38 -0.20 -0.03

Sonic Automotive Inc's interest coverage ratio has shown significant fluctuations over the past few years, based on the provided data. The interest coverage ratio indicates the company's ability to meet its interest obligations from its operating income.

Looking at the trend, Sonic Automotive experienced negative interest coverage ratios in the first half of 2020, indicating that the company was not generating enough operating income to cover its interest expenses during that period. However, beginning in the second half of 2020, the interest coverage ratio started to improve gradually, reaching a peak of 79.57 at the end of December 2024.

The substantial increase in the interest coverage ratio from negative levels to over 79 indicates a positive shift in Sonic Automotive's ability to cover its interest expenses with its operating income. This improvement suggests that the company's earnings are now more than sufficient to meet its interest obligations, indicating a stronger financial position and reduced financial risk.

Overall, the trend in Sonic Automotive Inc's interest coverage ratio demonstrates a notable recovery and improvement in the company's ability to service its debt obligations with its operating income over the years covered in the data.