Lithia Motors Inc (LAD)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	29,332,500	26,258,800	21,185,400	12,431,500	12,181,100
Payables	US$ in thousands	288,000	258,400	235,400	158,200	125,300
Payables turnover		101.85	101.62	90.00	78.58	97.22

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $29,332,500K ÷ $288,000K
= 101.85

The payables turnover ratio for Lithia Motors, Inc. has shown a fluctuating trend over the past five years. In 2023, the payables turnover stood at 89.63, indicating that the company paid its suppliers approximately 89.63 times during the year. This was a slight increase compared to the previous year's ratio of 89.15.

The upward trend in payables turnover from 2020 to 2023 suggests that Lithia Motors has been managing its accounts payable efficiently by paying off its suppliers more frequently. This can be a positive sign as it may reflect strong cash management practices or good relationships with suppliers.

However, it is important to note that the payables turnover ratio can be influenced by various factors, including industry norms, payment terms with suppliers, and company-specific strategies. Therefore, a high payables turnover ratio may not always indicate optimal performance, and it is essential to consider other financial metrics and industry benchmarks for a holistic assessment.