Lithia Motors Inc (LAD)

Operating return on assets (Operating ROA)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Operating income	US$ in thousands	1,692,400	1,941,100	1,662,500	692,700	495,000
Total assets	US$ in thousands	19,632,500	15,006,600	11,146,900	7,902,100	6,083,900
Operating ROA		8.62%	12.93%	14.91%	8.77%	8.14%

December 31, 2023 calculation

Operating ROA = Operating income ÷ Total assets
= $1,692,400K ÷ $19,632,500K
= 8.62%

The operating return on assets (operating ROA) for Lithia Motors, Inc. has exhibited fluctuations over the past five years. In 2023, the operating ROA was 8.62%, experiencing a decrease from the previous year's figure of 12.93%. Despite this decline, the company's operating ROA was notably higher in 2021 at 14.98% compared to both 2020 and 2019. This suggests that the company was able to generate more operating income relative to its total assets in 2021. However, there was a slight drop in the operating ROA in 2022, followed by a more significant decrease in 2023.

The varying performance of operating ROA indicates that the company's operational efficiency in generating profits from its assets has fluctuated over the years. It is essential for stakeholders to closely monitor these changes to assess the company's ability to utilize its assets effectively and generate sustainable returns in the long term. Further analysis of the company's operational and financial strategies may provide insights into the factors influencing these fluctuations in operating ROA.