Lithia Motors Inc (LAD)
Debt-to-equity ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| 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 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.55 | 0.74 |
December 31, 2024 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $—K ÷ $6,655,500K
= 0.00
The debt-to-equity ratio of Lithia Motors Inc has shown a notable downward trend over the years, indicating a decreasing reliance on debt financing and a strengthening equity position. As of December 31, 2020, the ratio stood at 0.74, reflecting a relatively higher level of debt compared to equity. However, by December 31, 2021, the ratio had decreased to 0.55, suggesting a reduction in financial leverage and a better balance between debt and equity.
Remarkably, from December 31, 2022 onwards, the debt-to-equity ratio dropped to 0.00, signaling that the company has either significantly paid down its debt or may have transitioned to a debt-free position with solely equity financing. This shift could indicate improved financial stability, lower financial risk, and potentially greater investor confidence in the company's financial health.
Overall, the declining trend in the debt-to-equity ratio for Lithia Motors Inc showcases a positive development in its capital structure and financial health, implying a prudent approach to managing its financial obligations and positioning itself for long-term growth and sustainability.
Peer comparison
Dec 31, 2024