Lithia Motors Inc (LAD)

Operating return on assets (Operating ROA)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Operating income	US$ in thousands	1,575,600	1,692,400	1,941,100	1,662,500	692,700
Total assets	US$ in thousands	23,127,900	19,632,500	15,006,600	11,146,900	7,902,100
Operating ROA		6.81%	8.62%	12.93%	14.91%	8.77%

December 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $1,575,600K ÷ $23,127,900K
= 6.81%

Operating ROA is a key financial ratio that measures a company's ability to generate operating income from its assets. For Lithia Motors Inc, the trend in Operating ROA over the past five years shows some fluctuations:

- In December 2020, Lithia Motors' Operating ROA was 8.77%, indicating that the company generated 8.77 cents of operating income for every dollar of assets.
- By December 2021, the Operating ROA had increased significantly to 14.91%, showing a strong improvement in the company's ability to generate operating income from its assets.
- In December 2022, there was a slight decrease in Operating ROA to 12.93%, but the ratio remained at a relatively high level compared to the previous years.
- However, by December 2023, the Operating ROA dropped to 8.62%, reflecting a decrease in the company's operating efficiency in generating income from its assets.
- Finally, by December 2024, the Operating ROA further decreased to 6.81%, indicating a continued decline in the company's ability to generate operating income relative to its asset base.

Overall, while there have been fluctuations in Lithia Motors' Operating ROA over the years, it is important for the company to closely monitor and manage this ratio to ensure optimal utilization of its assets and sustained profitability.