Lithia Motors Inc (LAD)

Debt-to-equity ratio

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
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
Total stockholders’ equity US$ in thousands 6,655,500 6,604,700 6,367,900 6,351,400 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
Debt-to-equity ratio 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.55 0.53 0.52 0.55 0.49 0.63 0.70 0.74 0.77 0.80 0.81

December 31, 2024 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $—K ÷ $6,655,500K
= 0.00

Lithia Motors Inc's debt-to-equity ratio has been on a declining trend from March 31, 2020, where it stood at 0.81, to December 31, 2021, where it dropped to 0.55. This indicates that the company's reliance on debt in relation to its equity has been decreasing over the period. The ratio continued to trend downwards in the first half of 2022, reaching 0.53 by June 30, 2022. However, the ratio experienced a sharp decline to 0.00 by December 31, 2022, and has remained at 0.00 since then.

A debt-to-equity ratio of 0.00 typically suggests that the company has no debt in relation to its equity, which may signal a favorable financial position from a debt management perspective. It's important to note that while a lower debt-to-equity ratio indicates a lower financial risk and better solvency, an extremely low ratio could also imply underleveraging, potentially missing out on growth opportunities that could be funded through debt.

Overall, based on the downward trend observed in Lithia Motors Inc's debt-to-equity ratio over the analyzed period, the company appears to have significantly reduced its debt levels in relation to equity, which may be viewed positively by investors and potential creditors.