Lithia Motors Inc (LAD)

Days of inventory on hand (DOH)

		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
Inventory turnover		6.17	6.49	6.44	6.91	7.70	7.70	8.18	8.63	8.88	9.48	7.49	5.93	4.99	4.10	4.50	3.29	3.27	4.39	4.23	4.18
DOH	days	59.17	56.25	56.70	52.84	47.39	47.37	44.62	42.29	41.10	38.49	48.73	61.50	73.19	89.06	81.05	111.00	111.73	83.11	86.31	87.42

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 6.17
= 59.17

Lithia Motors, Inc.'s days of inventory on hand (DOH) have shown a generally increasing trend over the past eight quarters. The DOH increased from 48.33 days in Q1 2022 to 67.22 days in Q4 2023. This indicates that, on average, the company held its inventory for approximately 67.22 days before selling it in the most recent quarter.

The gradual rise in DOH suggests that the company may be experiencing challenges in efficiently managing its inventory. A higher DOH can tie up capital in unsold inventory and potentially lead to higher holding costs.

It is important for Lithia Motors to closely monitor its inventory levels to ensure they align with sales demand. This will help optimize working capital utilization and reduce the risk of obsolete inventory. Further analysis, considering other financial metrics and industry benchmarks, would provide a more holistic view of the company's performance in inventory management.