Lithia Motors Inc (LAD)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 15.35% | 16.93% | 18.32% | 18.74% | 17.02% |
| Operating profit margin | 4.35% | 5.48% | 6.90% | 7.32% | 5.30% |
| Pretax margin | 2.92% | 4.38% | 6.11% | 6.52% | 4.96% |
| Net profit margin | 2.21% | 3.24% | 4.45% | 4.66% | 3.60% |
Lithia Motors Inc's profitability ratios have shown some fluctuations over the years. The gross profit margin has improved from 17.02% in December 31, 2020, to 18.74% in December 31, 2021, but then decreased slightly to 18.32% in December 31, 2022. However, it saw a more significant decline to 16.93% in December 31, 2023, and further dropped to 15.35% in December 31, 2024.
The operating profit margin followed a similar pattern, with an increase from 5.30% in December 31, 2020, to 7.32% in December 31, 2021, before declining to 6.90% in December 31, 2022. It then decreased to 5.48% in December 31, 2023, and further dropped to 4.35% in December 31, 2024.
The pretax margin also exhibited a similar trend, rising from 4.96% in December 31, 2020, to 6.52% in December 31, 2021, and then declining to 6.11% in December 31, 2022. Subsequently, it dropped to 4.38% in December 31, 2023, and decreased further to 2.92% in December 31, 2024.
Lastly, the net profit margin showed a consistent decrease over the years, starting at 3.60% in December 31, 2020, and declining to 2.21% in December 31, 2024. This indicates a downward trend in the company's overall profitability after an initial improvement. It is crucial for investors and stakeholders to monitor these ratios closely to assess the company's financial health and performance.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 6.81% | 8.62% | 12.93% | 14.91% | 8.77% |
| Return on assets (ROA) | 3.47% | 5.10% | 8.34% | 9.51% | 5.95% |
| Return on total capital | 23.67% | 27.24% | 37.28% | 23.18% | 14.97% |
| Return on equity (ROE) | 12.05% | 16.11% | 24.03% | 22.91% | 17.67% |
Lithia Motors Inc has shown a fluctuating trend in its profitability ratios over the past five years.
1. Operating Return on Assets (Operating ROA):
- The Operating ROA has ranged from 6.81% in December 2024 to a high of 14.91% in December 2021.
- Operating ROA indicates how well the company is generating profits from its operational assets. The company's efficiency in generating profits from its assets improved significantly in 2021 but declined in the following years.
2. Return on Assets (ROA):
- The ROA ranged from 3.47% in December 2024 to a high of 9.51% in December 2021.
- ROA measures overall profitability relative to total assets. The company's profitability relative to its total assets peaked in 2021 and decreased in the subsequent years.
3. Return on Total Capital:
- Return on Total Capital ranged from 14.97% in December 2020 to a high of 37.28% in December 2022.
- This ratio shows how efficiently the company is utilizing all of its capital to generate profits. The company's efficiency in generating returns from total capital saw a significant rise in 2022.
4. Return on Equity (ROE):
- ROE fluctuated between 12.05% in December 2024 and a peak of 24.03% in December 2022.
- ROE measures how well the company is generating profits from shareholder equity. The company's return on equity peaked in 2022 but declined in the subsequent years.
Overall, Lithia Motors Inc had a mixed performance in profitability ratios over the analyzed period, with fluctuations in operational efficiency, overall profitability, capital utilization, and return on equity. Further analysis would be needed to understand the factors contributing to these fluctuations and to assess the company's overall financial health.