Lithia Motors Inc (LAD)

Current ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total current assets	US$ in thousands	6,955,200	4,630,900	3,309,700	3,339,900	3,070,500
Total current liabilities	US$ in thousands	4,932,200	3,178,200	2,402,800	2,479,700	2,569,100
Current ratio		1.41	1.46	1.38	1.35	1.20

December 31, 2023 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $6,955,200K ÷ $4,932,200K
= 1.41

The current ratio of Lithia Motors, Inc. has exhibited a fluctuating trend over the past five years. The ratio stood at 1.41 as of December 31, 2023, which indicates that the company had $1.41 in current assets for every $1 in current liabilities.

Comparing this to the prior year-end, the current ratio decreased slightly from 1.46 to 1.41, showing a potential decrease in the company's ability to cover its short-term obligations. However, it is consistent with the general industry trends.

When looking at a longer historical perspective, we observe that the current ratio has generally been improving over the past five years, with the ratio increasing from 1.20 in 2019 to 1.41 in 2023. This suggests that the company has been strengthening its ability to meet its short-term liabilities with its current assets.

While a current ratio above 1 indicates that the company has more current assets than current liabilities, it is still important to assess the components of current assets and liabilities to get a more detailed understanding of the company's liquidity position. Further analysis integrating other financial metrics would provide a more comprehensive view of Lithia Motors, Inc.'s overall financial health.