Lithia Motors Inc (LAD)

Inventory turnover

		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
Cost of revenue (ttm)	US$ in thousands	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	7,950,300	10,479,900	10,284,200	10,191,900
Inventory	US$ in thousands	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	2,433,700	2,386,400	2,431,900	2,441,000
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

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $29,326,600K ÷ $4,753,900K
= 6.17

Lithia Motors, Inc.'s inventory turnover has displayed a declining trend over the past eight quarters. The turnover ratio decreased from 7.55 in Q1 2022 to 5.43 in Q4 2023. This declining trend indicates that the company is taking longer to sell its inventory. A lower inventory turnover may suggest overstocking or slow sales, which could tie up company resources and negatively impact profitability.

It is worth noting that although the inventory turnover ratio has been decreasing, it has remained above 5 consistently, indicating that the company is still relatively efficient in managing its inventory levels. However, management should closely monitor inventory levels and sales performance to ensure optimal inventory turnover and minimize the risk of obsolescence or carrying costs.