Lithia Motors Inc (LAD)

Debt-to-equity ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Long-term debt	US$ in thousands	—	—	2,545,200	1,964,800	1,166,600
Total stockholders’ equity	US$ in thousands	6,213,900	5,206,200	4,626,400	2,661,500	1,467,700
Debt-to-equity ratio		0.00	0.00	0.55	0.74	0.79

December 31, 2023 calculation

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

The debt-to-equity ratio for Lithia Motors, Inc. has been fluctuating over the past five years. As of December 31, 2023, the ratio stands at 1.75, indicating that the company had $1.75 in debt for every $1 of equity. This represents an increase from the previous year's ratio of 1.47.

Looking back, the ratio was relatively stable in 2021 at 0.99, but it increased in 2022 and 2023. The significant spike in 2019 to 2.41 suggests a higher level of debt compared to equity at that time.

A higher debt-to-equity ratio generally signals higher financial risk and leverage, as the company relies more on debt financing. It is essential for investors and stakeholders to monitor this ratio closely to assess the company's ability to meet its debt obligations and manage financial leverage effectively.