Lithia Motors Inc (LAD)

Return on total capital

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	1,575,600	1,692,400	1,941,100	1,662,500	692,700
Long-term debt	US$ in thousands	—	—	—	2,545,200	1,964,800
Total stockholders’ equity	US$ in thousands	6,655,500	6,213,900	5,206,200	4,626,400	2,661,500
Return on total capital		23.67%	27.24%	37.28%	23.18%	14.97%

December 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,575,600K ÷ ($—K + $6,655,500K)
= 23.67%

Based on the provided data, the return on total capital for Lithia Motors Inc has shown significant fluctuations over the years.

In December 31, 2020, the return on total capital stood at 14.97%, indicating the company generated approximately 15 cents in profit for every dollar of total capital employed.

By December 31, 2021, the return on total capital saw a substantial increase to 23.18%, reflecting improved efficiency in the allocation of resources and generating approximately 23 cents in profit for every dollar of total capital.

The following year, in December 31, 2022, the return on total capital surged to 37.28%, showcasing a remarkable performance in utilizing capital effectively to generate profits and earning approximately 37 cents on every dollar of total capital.

However, by December 31, 2023, the return on total capital declined to 27.24%, indicating a decrease in the efficiency of capital utilization compared to the previous year.

In the most recent period ending December 31, 2024, the return on total capital stood at 23.67%, showing a slight decrease from the previous year but still reflecting a healthy return on the total capital employed by Lithia Motors Inc.

Overall, the trend of return on total capital for Lithia Motors Inc indicates variability in the company's efficiency in generating profits from the total capital over the years, with notable peaks and troughs in performance.