Sonic Automotive (Sonic Automotive) Interest Coverage : 2.26 (As of Mar. 2024)

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What is Sonic Automotive Interest Coverage?

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. Sonic Automotive's Operating Income for the three months ended in Mar. 2024 was $108 Mil. Sonic Automotive's Interest Expense for the three months ended in Mar. 2024 was $-48 Mil. Sonic Automotive's interest coverage for the quarter that ended in Mar. 2024 was 2.26. The higher the ratio, the stronger the company's financial strength is.

The historical rank and industry rank for Sonic Automotive's Interest Coverage or its related term are showing as below:

SAH' s Interest Coverage Range Over the Past 10 Years
Min: 2.02 Med: 3.6 Max: 8.99
Current: 2.78

SAH's Interest Coverage is ranked worse than
75.05% of 1030 companies
in the Vehicles & Parts industry
Industry Median: 7.87 vs SAH: 2.78

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Sonic Automotive Interest Coverage Historical Data

The historical data trend for Sonic Automotive's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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Sonic Automotive Interest Coverage Chart

Sonic Automotive Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

Get a 7-Day Free Trial

3.24

4.59

8.99

5.36

2.88

Sonic Automotive Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Interest Coverage	Get a 7-Day Free Trial															2.57	3.20	3.08	2.62	2.26

Competitive Comparison of Sonic Automotive's Interest Coverage

For the Auto & Truck Dealerships subindustry, Sonic Automotive's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Sonic Automotive's Interest Coverage Distribution in the Vehicles & Parts Industry

For the Vehicles & Parts industry and Consumer Cyclical sector, Sonic Automotive's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Sonic Automotive's Interest Coverage falls into.

Sonic Automotive Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Sonic Automotive's Interest Coverage for the fiscal year that ended in Dec. 2023 is calculated as

Here, for the fiscal year that ended in Dec. 2023, Sonic Automotive's Interest Expense was $-174 Mil. Its Operating Income was $503 Mil. And its Long-Term Debt & Capital Lease Obligation was $2,090 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	502.9	/	-174.4
	=	2.88

Sonic Automotive's Interest Coverage for the quarter that ended in Mar. 2024 is calculated as

Here, for the three months ended in Mar. 2024, Sonic Automotive's Interest Expense was $-48 Mil. Its Operating Income was $108 Mil. And its Long-Term Debt & Capital Lease Obligation was $2,115 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Mar. 2024 )	/	Interest Expense (Q: Mar. 2024 )
	=	-1	*	107.7	/	-47.7
	=	2.26

The higher the ratio, the stronger the company's Financial Strength is.

Sonic Automotive (NYSE:SAH) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

Sonic Automotive Interest Coverage Related Terms

Thank you for viewing the detailed overview of Sonic Automotive's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

Sonic Automotive (Sonic Automotive) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Sonic Automotive Inc (NYSE:SAH) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

SA8A:Germany

Address

4401 Colwick Road, Charlotte, NC, USA, 28211

Website

https://www.sonicautomotive.com

Sonic Automotive is one of the largest auto dealership groups in the United States. The company has 108 franchised stores in 18 states, primarily in metropolitan areas in California, Texas, and the Southeast, plus 18 EchoPark and 7 Northwest Motorsports used-vehicle stores, and 16 collision centers. The company derives revenue from new and used vehicles plus parts and collision repair, finance, insurance, and wholesale auctions. Luxury and import dealerships make up about 83% of franchise new-vehicle revenue, while Honda, BMW, Mercedes, and Toyota constitute about 56% of new-vehicle revenue. BMW is the largest brand at about 26%. 2022's revenue was $14 billion, with EchoPark's portion totaling $2.5 billion. Sonic bought RFJ Auto in December 2021, which added $3.2 billion in sales.

Executives

Heath Byrd	officer: EVP and CFO	4401 COLWICK ROAD, CHARLOTTE NC 28211
Jeff Dyke	officer: EVP of Operations	C/O SONIC AUTOMOTIVE, INC., 6415 IDLEWILD ROAD, SUITE 109, CHARLOTTE NC 28212
David Bruton Smith	director, officer: Executive Vice President	C/O SONIC AUTOMOTIVE, INC., 6415 IDLEWILD ROAD, SUITE 109, CHARLOTTE NC 28212
Paul P. Rusnak	10 percent owner	325 W. COLORADO BLVD.,, PO BOX 70489, PASADENA CA 91117-7489
Michael Edward Hodge	director	4401 COLWICK ROAD, CHARLOTTE NC 28211
Keri A Kaiser	director	14902 PRESTON ROAD, SUITE 404, #384, DALLAS TX 75254
Victor H Doolan	director	35 VIA MONARCA, DANA POINT CA 92629
Marcus G Smith	10 percent owner	5555 CONCORD PARKWAY SOUTH, CONCORD NC 28027
Sonic Financial Corp	10 percent owner	5401 E INDEPENDENCE BLVD, CHARLOTTE NC 28212
O Bruton Smith	director, 10 percent owner, officer: Chairman and CEO	5401 E INDEPENDENCE BLVD, CHARLOTTE NC 28212
R Eugene Taylor	director	BANK OF AMERICA CORP, 100 NORTH TRYON ST NC1-007-57-01, CHARLOTTE NC 28255
Bryan Scott Smith	director, officer: Vice Chairman and CSO	5401 E INDEPENDENCE BLVD, CHARLOTTE NC 28212
Harris John W. Iii	director	4725 PIEDMONT ROW DRIVE, SUITE 800, CHARLOTTE NC 28210
Byrd Bernard Clinton Jr	director	4401 COLWICK ROAD, CHARLOTTE NC 28211
William I Belk	director	6100 FAIRVIEW RD #640, CHARLOTTE NC 28210