Lithia Motors Inc (LAD)
Solvency ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.19 | 0.19 | 0.21 | 0.23 | 0.22 | 0.26 | 0.24 | 0.25 | 0.20 | 0.22 | 0.20 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.35 | 0.35 | 0.34 | 0.35 | 0.33 | 0.39 | 0.41 | 0.42 | 0.44 | 0.44 | 0.45 |
| 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 |
| 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 |
Lithia Motors Inc's solvency ratios provide an insight into the company's ability to meet its long-term financial obligations. The Debt-to-assets ratio has been relatively stable over the years, ranging from 0.19 to 0.26, indicating that the proportion of the company's assets financed by debt has remained moderate.
The Debt-to-capital ratio shows a decreasing trend from 0.45 in March 2020 to 0.00 at the end of 2022, suggesting a lowering reliance on debt to finance the company's operations. This could indicate improved financial stability and lower financial risk.
The Debt-to-equity ratio has also shown a declining trend, starting from 0.81 in March 2020 and reaching 0.55 in September 2022, before dropping to 0.00. This trend indicates a decreasing reliance on debt in relation to equity, which is a positive sign for the company's financial health.
The Financial leverage ratio, which measures the extent of a company's financial leverage, has fluctuated over the years but ultimately increased from 2.94 in March 2021 to 3.48 in December 2024. This could indicate a higher level of financial risk and leverage in the company's capital structure.
Overall, the decreasing debt ratios and increasing financial leverage ratio suggest that Lithia Motors Inc has been actively managing its debt levels, potentially improving its solvency and financial stability over time.
Coverage ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 5.99 | 5.99 | 6.30 | 7.12 | 8.15 | 10.57 | 11.51 | 12.57 | 14.34 | 13.69 | 15.74 | 15.96 | 14.53 | 13.00 | 12.04 | 9.91 | 8.87 | 8.56 | 7.40 | 7.41 |
The interest coverage ratio of Lithia Motors Inc has shown a generally improving trend from March 31, 2020, to September 30, 2021, indicating the company's ability to comfortably meet its interest expenses. The ratio increased steadily from 7.41 on March 31, 2020, to 13.00 on September 30, 2021, showcasing an improving financial position and enhanced ability to cover interest payments.
However, from March 31, 2022, the interest coverage ratio began to fluctuate, reaching a peak of 15.96 on March 31, 2022, and then gradually declining to 5.99 by December 31, 2024. This decreasing trend could raise concerns about the company's ability to cover its interest expenses comfortably in the future.
Overall, while Lithia Motors Inc has shown strength in managing its interest obligations in the earlier period, the recent declining trend in the interest coverage ratio warrants further investigation and monitoring to ensure the company's financial stability and sustainability in meeting its debt obligations.