Lithia Motors Inc (LAD)

Debt-to-assets ratio

		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
Long-term debt	US$ in thousands	—	—	—	—	—	2,721,600	2,479,900	2,543,500	2,545,200	2,233,000	2,653,200	1,958,300	1,964,800	1,305,900	1,223,700	1,179,000	1,166,600	752,200	756,500	741,800
Total assets	US$ in thousands	19,632,500	18,269,800	17,682,700	16,421,400	15,006,600	14,074,500	13,007,700	12,080,800	11,146,900	10,204,600	10,092,500	8,251,600	7,902,100	6,395,700	5,539,000	6,014,100	6,083,900	5,737,500	5,774,600	5,692,000
Debt-to-assets ratio		0.00	0.00	0.00	0.00	0.00	0.19	0.19	0.21	0.23	0.22	0.26	0.24	0.25	0.20	0.22	0.20	0.19	0.13	0.13	0.13

December 31, 2023 calculation

Debt-to-assets ratio = Long-term debt ÷ Total assets
= $—K ÷ $19,632,500K
= 0.00

The debt-to-assets ratio of Lithia Motors, Inc. has been gradually increasing over the past eight quarters, indicating that the company has been relying more on debt to finance its assets. In Q4 2023, the ratio reached 0.56, the highest level in the provided data period. This suggests that more than half of the company's assets are funded by debt.

The consistent upward trend in the debt-to-assets ratio may raise concerns about the company's financial leverage and ability to meet debt obligations. However, it is important to note that the ratio has remained relatively stable around the 0.50 to 0.56 range over the past two years, indicating a consistent debt management strategy.

A higher debt-to-assets ratio may indicate increased financial risk, as higher debt levels can lead to higher interest expenses and repayment obligations. Investors and stakeholders should closely monitor the company's ability to generate sufficient cash flows to cover its debts and assess the overall financial health of Lithia Motors, Inc.