Lithia Motors Inc (LAD)

Current ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Total current assets	US$ in thousands	7,772,200	6,937,600	4,630,900	3,309,700	3,339,900
Total current liabilities	US$ in thousands	6,551,100	4,932,200	3,178,200	2,402,800	2,479,700
Current ratio		1.19	1.41	1.46	1.38	1.35

December 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $7,772,200K ÷ $6,551,100K
= 1.19

The current ratio of Lithia Motors Inc has shown a fluctuating trend over the past five years. As of December 31, 2020, the current ratio stood at 1.35, indicating that the company had $1.35 in current assets for every dollar of current liabilities.

Subsequently, the ratio increased to 1.38 by the end of 2021, suggesting a slight improvement in the company's short-term liquidity position. This was followed by a more significant increase to 1.46 by the end of 2022, reflecting a stronger ability to meet its short-term obligations.

However, the current ratio decreased to 1.41 by the end of 2023, although it still remained above the 1.0 threshold, indicating that the company's current assets continued to exceed its current liabilities.

The most notable change occurred by the end of 2024, when the current ratio dropped to 1.19. This decrease may raise concerns about the company's ability to cover its short-term obligations with its current assets.

Overall, while the current ratio has displayed some variability, the company generally maintained a healthy liquidity position during the period under review, ensuring it could meet its short-term financial obligations. However, the significant decrease in the current ratio in 2024 warrants further monitoring to assess the potential impact on the company's liquidity and financial health.