Lithia Motors Inc (LAD)

Receivables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	30,878,400	28,126,000	22,726,200	13,069,400	12,624,200
Receivables	US$ in thousands	1,123,100	813,100	910,000	614,000	505,000
Receivables turnover		27.49	34.59	24.97	21.29	25.00

December 31, 2023 calculation

Receivables turnover = Revenue ÷ Receivables
= $30,878,400K ÷ $1,123,100K
= 27.49

The receivables turnover ratio measures how effectively a company is managing its accounts receivable by evaluating how many times during a period the company collects its average accounts receivable balance. A higher receivables turnover ratio indicates that the company is collecting its outstanding receivables more quickly.

Looking at the historical trend of Lithia Motors, Inc.'s receivables turnover ratio over the past five years, we observe fluctuation in the values.

In 2023, the receivables turnover ratio stood at 27.64, which indicates that the company collected its accounts receivable approximately 27.64 times during the year. This represents a decrease from the 2022 ratio of 34.67, suggesting a possible slowdown in the collection of receivables compared to the previous year.

Compared to 2021 and 2019, where the ratios were 25.09 and 25.09 respectively, the 2023 ratio shows an improvement in the management of accounts receivable as it increased.

However, when compared to the lowest ratio in the period which was 21.38 in 2020, the 2023 ratio reflects better efficiency in collecting receivables.

Overall, despite the year-over-year fluctuation, the receivables turnover ratio of Lithia Motors, Inc. seems to indicate a general improvement in managing its accounts receivable over the years, with 2023 showing an improvement and a solid performance in this aspect.