Lithia Motors Inc (LAD)

Return on equity (ROE)

		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
Net income (ttm)	US$ in thousands	1,000,900	1,035,000	1,103,100	1,137,200	1,250,700	1,294,200	1,272,500	1,246,100	1,060,100	956,600	807,500	580,300	470,300	350,700	277,100	261,300	271,500	263,400	271,300	270,100
Total stockholders’ equity	US$ in thousands	6,213,900	5,996,400	5,755,600	5,437,300	5,206,200	4,983,700	4,691,900	4,904,400	4,626,400	4,542,700	4,228,400	2,807,600	2,661,500	1,694,400	1,532,200	1,456,500	1,467,700	1,359,200	1,274,700	1,250,500
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%

December 31, 2023 calculation

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

Lithia Motors, Inc.'s return on equity (ROE) has shown a declining trend over the past eight quarters, starting at a robust 27.12% in Q2 2022 and decreasing to 16.11% in Q4 2023. This downward trajectory indicates a potential weakening in the company's ability to generate profits from shareholders' equity.

The decreasing ROE could be a concern for investors and stakeholders as it suggests a decline in the company's efficiency in using equity to generate profits. It is essential for the company to closely monitor and address the factors contributing to this decline to ensure sustainable profitability and shareholder value.

Further analysis and comparison with industry peers may provide insights into the reasons behind the decreasing ROE and help management make informed decisions to improve the company's financial performance.