Lithia Motors Inc (LAD)
Profitability ratios
Return on sales
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 16.95% | 17.16% | 17.53% | 17.94% | 18.34% | 18.91% | 19.23% | 19.21% | 18.74% | 17.97% | 17.52% | 16.98% | 17.02% | 16.80% | 16.01% | 15.63% | 15.48% | 15.33% | 15.26% | 15.15% |
| Operating profit margin | 5.49% | 5.70% | 6.06% | 6.40% | 6.91% | 7.44% | 7.61% | 7.69% | 7.31% | 6.84% | 6.47% | 5.74% | 5.30% | 4.73% | 4.07% | 3.82% | 3.92% | 3.87% | 3.87% | 3.85% |
| Pretax margin | 4.38% | 4.67% | 5.15% | 5.52% | 6.12% | 6.62% | 6.77% | 6.93% | 6.52% | 6.42% | 6.20% | 5.45% | 4.96% | 3.94% | 3.18% | 2.88% | 2.97% | 2.90% | 2.89% | 2.88% |
| Net profit margin | 3.24% | 3.43% | 3.78% | 4.01% | 4.45% | 4.72% | 4.84% | 4.97% | 4.66% | 4.69% | 4.53% | 3.97% | 3.60% | 2.84% | 2.29% | 2.08% | 2.15% | 2.13% | 2.24% | 2.25% |
Lithia Motors, Inc.'s profitability ratios, as indicated by the gross profit margin, operating profit margin, pretax margin, and net profit margin, have shown a decreasing trend over the quarters from Q1 2022 to Q4 2023. The gross profit margin, which reveals the percentage of revenue remaining after deducting the cost of goods sold, decreased from 19.14% in Q1 2022 to 16.84% in Q4 2023. This suggests a potential decline in the efficiency of the company's production and distribution processes.
Similarly, the operating profit margin, which represents the efficiency of the company's core operations in generating profits, also decreased from 7.72% in Q1 2022 to 5.45% in Q4 2023. This could indicate challenges in controlling operating expenses or declining sales margins.
The pretax margin, indicating the percentage of profits relative to total revenue before accounting for taxes, exhibited a downward trend from 6.92% in Q1 2022 to 4.39% in Q4 2023. This suggests that the company's profitability before tax has been gradually shrinking.
Finally, the net profit margin, which reflects the company's bottom-line profitability after all expenses, decreased from 4.95% in Q1 2022 to 3.22% in Q4 2023. This downward trajectory indicates that the company's overall profitability has been declining over the analyzed period.
Overall, based on these profitability ratios, Lithia Motors, Inc. has faced challenges in maintaining its profitability levels, potentially indicating deteriorating operational efficiency or increasing cost pressures. It would be prudent for stakeholders to closely monitor these trends and assess the company's strategies to address these profitability issues.
Return on investment
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.62% | 9.42% | 10.01% | 11.04% | 12.93% | 14.49% | 15.40% | 15.98% | 14.91% | 13.67% | 11.44% | 10.16% | 8.77% | 9.15% | 8.88% | 7.97% | 8.14% | 8.36% | 8.14% | 8.11% |
| Return on assets (ROA) | 5.10% | 5.67% | 6.24% | 6.93% | 8.33% | 9.20% | 9.78% | 10.31% | 9.51% | 9.37% | 8.00% | 7.03% | 5.95% | 5.48% | 5.00% | 4.34% | 4.46% | 4.59% | 4.70% | 4.75% |
| Return on total capital | 27.24% | 28.69% | 30.75% | 33.35% | 37.28% | 26.46% | 27.94% | 25.92% | 23.18% | 20.58% | 16.78% | 17.59% | 14.98% | 19.49% | 17.86% | 18.19% | 18.79% | 22.71% | 23.15% | 23.18% |
| Return on equity (ROE) | 16.11% | 17.26% | 19.17% | 20.91% | 24.02% | 25.97% | 27.12% | 25.41% | 22.91% | 21.06% | 19.10% | 20.67% | 17.67% | 20.70% | 18.09% | 17.94% | 18.50% | 19.38% | 21.28% | 21.60% |
Lithia Motors, Inc. has displayed a declining trend in its profitability ratios over the past eight quarters. The Operating Return on Assets (Operating ROA) decreased from 16.09% in Q1 2022 to 8.62% in Q4 2023, indicating the company's declining ability to generate operating profit from its assets.
Similarly, the Return on Assets (ROA) declined from 10.31% in Q1 2022 to 5.10% in Q4 2023, reflecting a decrease in the company's overall profitability in generating earnings from its total assets. This downward trend is consistent with the Operating ROA decline and may suggest inefficiencies in asset utilization.
The Return on Total Capital ratio also witnessed a downward trend, decreasing from 19.50% in Q1 2022 to 9.89% in Q4 2023. This indicates a decrease in the company's ability to generate returns for both debt and equity holders, signaling potential challenges in efficiently utilizing its total capital to generate profits.
Furthermore, the Return on Equity (ROE) ratio shows a similar declining trend from 27.12% in Q2 2022 to 16.11% in Q4 2023. This indicates a decrease in the company's ability to generate profits for its shareholders from their investments, which could raise concerns among investors regarding the company's financial performance and long-term sustainability.
Overall, the declining trend in profitability ratios for Lithia Motors, Inc. suggests the company may be experiencing challenges in effectively leveraging its assets and capital to generate sustainable returns, which may require management attention to address strategic and operational inefficiencies.