Lithia Motors Inc (LAD)

Return on equity (ROE)

		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 stockholders’ equity	US$ in thousands	6,213,900	5,206,200	4,626,400	2,661,500	1,467,700
ROE		16.11%	24.03%	22.91%	17.67%	18.50%

December 31, 2023 calculation

ROE = Net income ÷ Total stockholders’ equity
= $1,000,800K ÷ $6,213,900K
= 16.11%

Lithia Motors, Inc.'s return on equity (ROE) has demonstrated fluctuations over the past five years. The ROE decreased from 18.50% in 2019 to 17.67% in 2020, indicating a temporary decline in the company's ability to generate profits from shareholders' equity during the year 2020. However, the ROE rebounded significantly in 2021, reaching 22.91%, showcasing an improvement in the company's efficiency in utilizing shareholder funds to generate earnings.

In 2022, the ROE saw a notable increase to 24.03%, indicating that the company continued to strengthen its profitability and efficiency in generating returns for shareholders. However, in 2023, the ROE decreased to 16.11%, signifying a decline in the company's ability to generate profits from shareholders' equity compared to the previous year.

Overall, Lithia Motors, Inc.'s ROE performance has shown some fluctuations, with periods of improvement and slight declines. It is essential for investors to monitor these changes in ROE to assess the company's profitability and efficiency in utilizing shareholder equity effectively.