Lithia Motors Inc (LAD)

Financial leverage 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
Total assets	US$ in thousands	23,127,900	23,261,500	23,205,200	22,180,000	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
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
Financial leverage ratio		3.48	3.52	3.64	3.49	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

December 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $23,127,900K ÷ $6,655,500K
= 3.48

Lithia Motors Inc's financial leverage ratio, which measures the proportion of the company's debt to its equity, has shown some fluctuations over the reporting periods provided.

From March 31, 2020, to December 31, 2022, the financial leverage ratio declined steadily from 4.13 to 2.88, indicating a decreasing reliance on debt to finance its operations. This trend suggests that the company may have been paying down debt or increasing equity levels during this period.

However, from March 31, 2023, onwards, the financial leverage ratio started to increase gradually, reaching 3.48 by December 31, 2024. This uptick in the ratio could indicate that the company may have taken on more debt relative to its equity, which might be for various reasons such as expanding operations, investing in new projects, or facing financial challenges.

Overall, the trend in Lithia Motors Inc's financial leverage ratio shows a period of deleveraging followed by a more recent increase in leverage. It is important for stakeholders to closely monitor this ratio to assess the company's ability to manage its debt levels effectively and maintain a healthy balance between debt and equity financing.