Lithia Motors Inc (LAD)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 34,639,200 | 29,332,500 | 26,258,800 | 21,185,400 | 12,431,500 |
| Inventory | US$ in thousands | 5,911,700 | 4,753,900 | 3,409,400 | 2,385,500 | 2,492,900 |
| Inventory turnover | 5.86 | 6.17 | 7.70 | 8.88 | 4.99 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $34,639,200K ÷ $5,911,700K
= 5.86
Lithia Motors Inc's inventory turnover has shown a generally improving trend over the past five years. The inventory turnover ratio increased from 4.99 in December 2020 to 8.88 in December 2021, indicating that the company's inventory was being sold and replaced at a faster rate. Subsequently, the ratio slightly decreased to 7.70 in December 2022 but remained at a relatively healthy level.
However, there was a more noticeable drop in inventory turnover to 6.17 in December 2023, possibly indicating a longer period for inventory to be sold or a buildup of excess inventory. The trend continued with a further decrease to 5.86 in December 2024, suggesting a potential need for the company to reassess its inventory management strategies to optimize turnover and liquidity.
Overall, while the inventory turnover for Lithia Motors Inc has shown fluctuations, it remains essential for the company to closely monitor and manage its inventory levels to ensure efficient operations and maximize profitability.
Peer comparison
Dec 31, 2024