Lithia Motors Inc (LAD)

Activity ratios

Short-term

Turnover ratios

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
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
Receivables turnover 29.03 28.59 27.01 25.94 27.47 30.20 33.01 33.62 34.54 27.30 26.90 27.16 24.98 25.08 22.31 19.71 21.29 24.14 27.07 42.13
Payables turnover 103.80 110.15 84.66 94.56 101.83 93.01 92.52 83.23 101.62 105.66 91.63 89.36 90.00 76.93 65.51 69.34 78.58 58.08 65.42 75.87
Working capital turnover 29.61 28.13 25.14 28.38 15.38 20.91 20.20 23.62 19.33 14.78 17.01 23.68 25.06 22.80 13.99 21.53 15.19 22.96 29.93 25.41

Lithia Motors Inc's inventory turnover has shown an improving trend over the period under review, increasing from 3.29 in March 2020 to 5.86 in December 2024. This indicates that the company is efficiently managing its inventory by selling and replenishing stock more frequently.

On the other hand, the receivables turnover ratio has been more volatile, ranging from 19.71 in March 2021 to 34.54 in December 2022. Overall, the company is collecting its receivables at a pace between 20 to 30 times a year, suggesting a relatively efficient credit management.

In terms of payables turnover, there is also some fluctuation, with the ratio ranging from 58.08 in September 2020 to 110.15 in September 2024. This variability could indicate changing payment terms with suppliers over the years.

Lastly, the working capital turnover ratio has shown a mixed pattern, declining from 29.93 in June 2020 to 15.38 in December 2023, before recovering to 29.61 by December 2024. This suggests that the efficiency of utilizing working capital has varied but improved towards the end of the period.

Overall, the activity ratios of Lithia Motors Inc reflect a mixed performance in managing its operational resources, with improvements in inventory turnover and working capital turnover, while showing more volatility in receivables turnover and payables turnover.

Average number of days

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
Days of inventory on hand (DOH) days 62.29 67.09 70.76 69.07 59.17 56.25 56.70 52.84 47.39 47.37 44.62 42.29 41.10 38.49 48.73 61.50 73.19 89.06 81.05 111.00
Days of sales outstanding (DSO) days 12.57 12.77 13.51 14.07 13.29 12.09 11.06 10.86 10.57 13.37 13.57 13.44 14.61 14.56 16.36 18.52 17.15 15.12 13.48 8.66
Number of days of payables days 3.52 3.31 4.31 3.86 3.58 3.92 3.95 4.39 3.59 3.45 3.98 4.08 4.06 4.74 5.57 5.26 4.64 6.28 5.58 4.81

Lithia Motors Inc's Days of Inventory on Hand (DOH) ratio has shown a decreasing trend over the period from March 31, 2020, to December 31, 2024. This indicates the company has been managing its inventory efficiently, with a gradual reduction in the number of days it takes to sell its inventory.

The Days of Sales Outstanding (DSO) ratio reflects the company's ability to collect its accounts receivable. Lithia Motors Inc showed a fluctuating trend in DSO during the same period, but generally, the number of days of sales outstanding decreased from 17.15 days on December 31, 2020, to 12.57 days on December 31, 2024. This implies the company has been effectively collecting payments from its customers within a shorter timeframe.

The Number of Days of Payables metric indicates how long it takes for the company to pay its suppliers. Lithia Motors Inc managed to keep this number relatively stable, ranging between 3.31 days on September 30, 2024, and 6.28 days on September 30, 2020. A lower number of days of payables suggests the company is paying its suppliers more quickly.

Overall, the trends in these activity ratios for Lithia Motors Inc indicate efficient management of inventory, accounts receivable, and payables, which are crucial for maintaining a healthy cash flow and operational efficiency.

Long-term

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
Fixed asset turnover 8.01 7.41 7.27 7.20 8.02 7.64 7.47 7.62 8.03 7.90 7.76 7.73 6.65 8.66 7.76 6.57 5.95 6.87 7.27 7.70
Total asset turnover 1.56 1.49 1.45 1.46 1.57 1.65 1.65 1.73 1.87 1.95 2.02 2.08 2.04 2.00 1.77 1.77 1.65 1.93 2.18 2.09

Lithia Motors Inc's Fixed Asset Turnover ratio has shown a fluctuating trend over the observed periods, ranging from a low of 5.95 on December 31, 2020, to a high of 8.66 on September 30, 2021. This ratio measures the efficiency with which the company is generating sales from its investment in fixed assets. Generally, a higher fixed asset turnover ratio indicates better utilization of fixed assets to generate sales.

On the other hand, the Total Asset Turnover ratio has also displayed variability, with a low of 1.46 on March 31, 2024, to a high of 2.18 on June 30, 2020. This ratio reflects how well the company is generating sales from its total assets. A higher total asset turnover ratio signifies that the company is efficiently using its assets to generate revenue.

Overall, it is essential for Lithia Motors Inc to closely monitor these long-term activity ratios to ensure optimal utilization of its assets and drive profitability in the long run. Analyzing these ratios in conjunction with other relevant financial metrics can provide a comprehensive insight into the company's operational efficiency and performance.