Lithia Motors Inc (LAD)

Net profit margin

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	US$ in thousands	1,000,800	1,251,000	1,060,100	470,300	271,500
Revenue	US$ in thousands	30,878,400	28,126,000	22,726,200	13,069,400	12,624,200
Net profit margin		3.24%	4.45%	4.66%	3.60%	2.15%

December 31, 2023 calculation

Net profit margin = Net income ÷ Revenue
= $1,000,800K ÷ $30,878,400K
= 3.24%

Lithia Motors, Inc.'s net profit margin has fluctuated over the past five years, ranging from 2.14% in 2019 to 4.64% in 2021. In 2020, the net profit margin was 3.58%, followed by a slight decrease to 4.44% in 2022, and a further decrease to 3.22% in 2023.

The net profit margin indicates the percentage of revenue that translates into profit after all expenses have been deducted. A higher net profit margin is generally preferable as it signifies that the company is effectively controlling costs and generating more profit from its sales.

Lithia Motors' declining net profit margin from 2021 to 2023 may indicate challenges in maintaining profitability relative to its revenue. The company may need to assess its cost structure, pricing strategies, and operational efficiency to improve its profitability performance and create value for its shareholders.