Lithia Motors Inc (LAD)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	972,000	271,500	153,000	160,200	84,000
Short-term investments	US$ in thousands	—	—	—	—	66,100
Total current liabilities	US$ in thousands	4,932,200	3,178,200	2,402,800	2,479,700	2,569,100
Cash ratio		0.20	0.09	0.06	0.06	0.06

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($972,000K + $—K) ÷ $4,932,200K
= 0.20

The cash ratio of Lithia Motors, Inc. has shown a consistent increasing trend over the past five years, indicating an improvement in the company's ability to cover its short-term liabilities with cash and cash equivalents. As of Dec 31, 2023, the cash ratio stood at 0.22, which means that for every dollar of current liabilities, the company had $0.22 in cash and cash equivalents available to cover those obligations.

This upward trend in the cash ratio reflects a strengthening liquidity position for Lithia Motors, Inc., suggesting that the company has been more effective in managing its cash resources and maintaining adequate liquidity levels to meet its short-term financial obligations. Additionally, a higher cash ratio signifies a lower risk of financial distress due to insufficient cash on hand to meet immediate payment requirements.

Overall, the improving cash ratio of Lithia Motors, Inc. demonstrates a positive liquidity position and a better ability to weather any short-term financial uncertainties that may arise in the future.