Lithia Motors Inc (LAD)

Fixed asset turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	30,878,400	28,126,000	22,726,200	13,069,400	12,624,200
Property, plant and equipment	US$ in thousands	3,848,700	3,498,700	3,416,500	2,197,500	1,611,700
Fixed asset turnover		8.02	8.04	6.65	5.95	7.83

December 31, 2023 calculation

Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $30,878,400K ÷ $3,848,700K
= 8.02

Lithia Motors, Inc.'s fixed asset turnover ratio has exhibited some variability over the past five years. In 2023, the fixed asset turnover ratio was 7.80, indicating that the company generated $7.80 in sales for every $1 invested in fixed assets during the year. This figure was slightly lower than the previous year's ratio of 7.89, reflecting a minor dip in efficiency in utilizing fixed assets to generate revenue.

Comparing 2023 to 2021, there was an improvement in fixed asset turnover from 7.48 to 7.80, suggesting that the company enhanced its efficiency in generating sales from its fixed asset base during the year. Additionally, the 2023 ratio outperformed the 2020 figure of 5.97, showcasing a significant increase in utilizing fixed assets to drive sales.

However, when compared to 2019, where the fixed asset turnover ratio was 7.86, there was a slight decline in 2023. This indicates that Lithia Motors was slightly less efficient in converting fixed assets into sales in 2023 compared to the previous year.

Overall, while there have been fluctuations in Lithia Motors' fixed asset turnover ratio over the past five years, the company has generally demonstrated a strong ability to efficiently utilize its fixed assets to generate revenue.