Lithia Motors Inc (LAD)
Financial leverage 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 19,632,500 | 18,269,800 | 17,682,700 | 16,421,400 | 15,006,600 | 14,074,500 | 13,007,700 | 12,080,800 | 11,146,900 | 10,204,600 | 10,092,500 | 8,251,600 | 7,902,100 | 6,395,700 | 5,539,000 | 6,014,100 | 6,083,900 | 5,737,500 | 5,774,600 | 5,692,000 |
| 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 |
| Financial leverage ratio | 3.16 | 3.05 | 3.07 | 3.02 | 2.88 | 2.82 | 2.77 | 2.46 | 2.41 | 2.25 | 2.39 | 2.94 | 2.97 | 3.77 | 3.62 | 4.13 | 4.15 | 4.22 | 4.53 | 4.55 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $19,632,500K ÷ $6,213,900K
= 3.16
The financial leverage ratio of Lithia Motors, Inc. has shown an increasing trend over the past eight quarters. The ratio increased from 2.46 in Q1 2022 to 3.16 in Q4 2023. This indicates that the company is relying more on debt financing relative to equity to support its operations and growth.
The steady increase in the financial leverage ratio suggests that Lithia Motors, Inc. has been taking on more debt to fund its activities. While higher leverage can amplify returns when business is good, it also increases financial risk, as the company has higher debt obligations to meet, especially during economic downturns or challenging business environments.
It is important for investors and stakeholders to monitor the financial leverage ratio closely to ensure that the company's debt levels are sustainable and manageable in the long term. Additionally, a high financial leverage ratio may signal potential liquidity issues and constraints on future growth opportunities if not carefully managed.
Peer comparison
Dec 31, 2023