Lithia Motors Inc (LAD)

Working capital 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
Revenue (ttm)	US$ in thousands	36,158,900	34,572,100	33,569,600	32,405,400	30,848,600	30,176,800	29,204,400	28,342,500	28,084,900	27,422,400	26,318,100	25,093,700	22,727,900	20,377,000	17,838,800	14,600,400	13,069,800	12,354,800	12,083,600	12,562,400
Total current assets	US$ in thousands	7,772,200	7,893,100	8,355,400	7,733,200	6,937,600	5,818,200	5,494,000	5,147,700	4,630,900	4,682,300	4,161,800	3,884,600	3,309,700	3,075,500	3,870,800	3,288,900	3,339,900	2,750,400	2,430,100	2,925,800
Total current liabilities	US$ in thousands	6,551,100	6,664,100	7,019,900	6,591,500	4,932,200	4,375,300	4,048,200	3,948,000	3,178,200	2,826,600	2,614,400	2,825,100	2,402,800	2,181,800	2,595,800	2,610,900	2,479,700	2,212,400	2,026,400	2,431,500
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

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $36,158,900K ÷ ($7,772,200K – $6,551,100K)
= 29.61

The working capital turnover of Lithia Motors Inc has fluctuated over the period from March 31, 2020, to December 31, 2024. The ratios have ranged from a low of 13.99 on June 30, 2021, to a high of 29.61 on December 31, 2024. The average working capital turnover during this period was approximately 22.17.

A high working capital turnover ratio indicates that the company is effectively utilizing its working capital to generate sales. Conversely, a low ratio may suggest inefficiency in managing working capital or potential liquidity issues.

Lithia Motors Inc experienced a significant drop in working capital turnover in the first half of 2021, which could indicate challenges in efficiently converting working capital into sales during that period. However, the ratio improved in subsequent periods, reaching a peak by the end of 2024.

Overall, the trend in working capital turnover for Lithia Motors Inc shows variability but ends on a positive note, with the company demonstrating improved efficiency in utilizing its working capital to drive sales.