Lithia Motors Inc (LAD)

Debt-to-capital 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 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
Debt-to-capital ratio		0.00	0.00	0.00	0.00	0.00	0.35	0.35	0.34	0.35	0.33	0.39	0.41	0.42	0.44	0.44	0.45	0.44	0.36	0.37	0.37

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $—K ÷ ($—K + $6,213,900K)
= 0.00

The debt-to-capital ratio of Lithia Motors, Inc. has exhibited a gradual increase over the past eight quarters, rising from 0.51 in Q1 2022 to 0.64 in Q4 2023. This indicates that the company's proportion of debt relative to its total capital has been on an upward trend. A higher debt-to-capital ratio signifies that a larger portion of the company's capital structure is funded by debt rather than equity.

While an increasing debt-to-capital ratio can imply higher financial leverage and potential risk due to increased reliance on debt financing, it may also suggest that the company is utilizing debt as a strategic tool to fund expansion or growth opportunities. It is essential for investors and stakeholders to carefully monitor this trend in relation to the company's overall financial health and operational performance. Additionally, comparing the debt-to-capital ratio with industry benchmarks and similar companies can provide further insights into Lithia Motors, Inc.'s capital structure and financial risk profile.