Lithia Motors Inc (LAD)

Cash ratio

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cash and cash equivalents	US$ in thousands	972,000	286,700	229,200	324,700	271,500	172,700	64,400	131,600	153,000	137,800	780,900	170,300	160,200	57,100	120,300	56,600	84,000	27,100	44,700	45,000
Short-term investments	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	66,100	—	—	—
Total current liabilities	US$ in thousands	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	2,569,100	2,483,400	2,605,300	2,585,200
Cash ratio		0.20	0.07	0.06	0.08	0.09	0.06	0.02	0.05	0.06	0.06	0.30	0.07	0.06	0.03	0.06	0.02	0.06	0.01	0.02	0.02

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 fluctuated over the past eight quarters, ranging from a low of 0.07 in Q3 2023 to a high of 0.22 in Q4 2023. The cash ratio measures the company's ability to cover its short-term liabilities with its available cash and cash equivalents. A higher cash ratio indicates a stronger ability to cover short-term obligations, while a lower ratio may suggest potential liquidity challenges.

In Q4 2023, the cash ratio of 0.22 indicates that Lithia Motors had $0.22 in cash and equivalents for every dollar of current liabilities, reflecting an improved liquidity position compared to the previous quarters. This may signify better cash management practices, increased cash reserves, or lower short-term obligations during that period.

Conversely, the lower cash ratios in Q3 and Q2 2023 may raise concerns about the company's ability to meet its short-term obligations with its available cash resources. A ratio below 1 implies that the company may not have enough liquid assets to cover all its current liabilities.

Overall, while the fluctuations in the cash ratio demonstrate variability in Lithia Motors' liquidity position over the quarters, further analysis of the company's cash management strategies and working capital trends would be necessary to assess its overall financial health and ability to meet its short-term obligations effectively.