Lithia Motors Inc (LAD)

Inventory turnover

		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
Cost of revenue (ttm)	US$ in thousands	34,639,200	33,189,200	32,203,400	30,977,700	29,326,600	28,580,700	27,543,200	26,635,000	26,258,800	25,496,500	24,418,500	23,278,700	21,185,600	19,085,600	16,770,200	13,826,100	12,431,500	8,723,700	8,164,000	8,262,700
Inventory	US$ in thousands	5,911,700	6,100,200	6,242,900	5,861,900	4,753,900	4,404,500	4,278,900	3,855,600	3,409,400	3,309,300	2,985,000	2,697,300	2,385,500	2,012,600	2,238,800	2,329,700	2,492,900	2,128,700	1,812,800	2,512,800
Inventory turnover		5.86	5.44	5.16	5.28	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

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $34,639,200K ÷ $5,911,700K
= 5.86

Lithia Motors Inc's inventory turnover has shown a generally increasing trend over the past few years, indicating efficiency in managing its inventory. The inventory turnover ratio increased from 3.29 in March 2020 to 5.86 in December 2024, with fluctuations along the way.

The company's ability to turn over its inventory improved significantly up until June 2021, reaching a peak of 7.49, suggesting that inventory was being sold and replenished at a faster rate. However, the ratio slightly decreased in the following quarters but remained relatively stable.

A high inventory turnover ratio indicates that Lithia Motors Inc is effectively selling its inventory, which could be attributed to strong demand for its products or efficient inventory management practices. Despite some fluctuations, the overall trend suggests that the company has been successful in managing its inventory efficiently over the analyzed period.