Lithia Motors Inc (LAD)

Return on assets (ROA)

		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
Total assets	US$ in thousands	19,632,500	15,006,600	11,146,900	7,902,100	6,083,900
ROA		5.10%	8.34%	9.51%	5.95%	4.46%

December 31, 2023 calculation

ROA = Net income ÷ Total assets
= $1,000,800K ÷ $19,632,500K
= 5.10%

Over the past five years, Lithia Motors, Inc.'s return on assets (ROA) has fluctuated. In 2021, the company achieved a relatively high ROA of 9.51%, indicating that it generated 9.51 cents of profit for every dollar of assets it owns. This strong performance was followed by a slight decrease in 2022 to 8.34%. In 2023, the ROA dropped further to 5.10%, suggesting a potential decline in the company's efficiency in generating profits from its assets.

Comparing the recent ROA figures to the five-year trend, it is evident that Lithia Motors experienced variability in its asset utilization efficiency, with 2021 being a standout year. The company's ability to generate returns from its assets may be influenced by factors such as operational effectiveness, management of resources, economic conditions, and industry dynamics.

It would be advisable for stakeholders to further investigate the reasons behind the recent decline in ROA to assess the company's operational performance in utilizing its assets effectively. Additionally, monitoring future ROA trends and comparing them with industry benchmarks can help in evaluating Lithia Motors' overall financial health and efficiency in generating profits.