Lithia Motors Inc (LAD)

Debt-to-equity 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-equity ratio		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	0.79	0.55	0.59	0.59

December 31, 2023 calculation

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

The trend in Lithia Motors, Inc.'s debt-to-equity ratio has been steadily increasing over the past eight quarters, indicating a rising proportion of debt relative to equity in the company's capital structure.

In Q1 2022, the debt-to-equity ratio was 1.03, signifying a lower level of leverage. However, there has been a consistent upward trajectory in subsequent quarters, with the ratio reaching 1.75 in Q4 2023, reflecting a higher reliance on debt to finance the company's operations and growth.

This increasing trend may raise concerns about the company's financial risk and solvency, as higher debt levels can lead to higher interest expenses and repayment obligations, potentially impacting profitability and financial stability.

Further analysis of the reasons behind this rising trend in the debt-to-equity ratio, as well as consideration of the company's overall financial health and ability to service its debt obligations, would be necessary to form a comprehensive assessment of Lithia Motors, Inc.'s leverage position.