Lithia Motors Inc (LAD)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	972,000	271,500	153,000	160,200	84,000
Short-term investments	US$ in thousands	—	—	—	—	66,100
Receivables	US$ in thousands	1,123,100	813,100	910,000	614,000	505,000
Total current liabilities	US$ in thousands	4,932,200	3,178,200	2,402,800	2,479,700	2,569,100
Quick ratio		0.42	0.34	0.44	0.31	0.25

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($972,000K + $—K + $1,123,100K) ÷ $4,932,200K
= 0.42

The quick ratio of Lithia Motors, Inc. has shown fluctuations over the past five years. The quick ratio measures the company's ability to meet its short-term obligations with its most liquid assets excluding inventory.

In 2023, the quick ratio stands at 0.45, indicating that the company has $0.45 of liquid assets available to cover each dollar of its current liabilities. This represents an improvement compared to the ratios of 0.38 in 2022 and 0.34 in 2020.

However, the quick ratio was higher in 2021 at 0.48, suggesting a stronger ability to meet short-term obligations with available liquid assets. The lowest quick ratio of 0.25 was recorded in 2019, indicating a potential liquidity risk.

Overall, the trend in the quick ratio of Lithia Motors, Inc. indicates some variability in the company's ability to quickly cover its short-term liabilities with liquid assets, which may warrant further investigation into the company's liquidity management strategies.