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Lithia Motors (Lithia Motors) ROE %

: 13.99% (As of Dec. 2023)
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ROE % is calculated as Net Income divided by its average Total Stockholders Equity over a certain period of time. Lithia Motors's annualized net income for the quarter that ended in Dec. 2023 was $854 Mil. Lithia Motors's average Total Stockholders Equity over the quarter that ended in Dec. 2023 was $6,105 Mil. Therefore, Lithia Motors's annualized ROE % for the quarter that ended in Dec. 2023 was 13.99%.

The historical rank and industry rank for Lithia Motors's ROE % or its related term are showing as below:

LAD' s ROE % Range Over the Past 10 Years
Min: 17.49   Med: 23.14   Max: 29.09
Current: 17.49

During the past 13 years, Lithia Motors's highest ROE % was 29.09%. The lowest was 17.49%. And the median was 23.14%.

LAD's ROE % is ranked better than
82.95% of 1267 companies
in the Vehicles & Parts industry
Industry Median: 7.46 vs LAD: 17.49

Lithia Motors ROE % Historical Data

The historical data trend for Lithia Motors's ROE % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Lithia Motors Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
ROE %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 20.38 22.78 29.09 25.45 17.53

Lithia Motors Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
ROE % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 19.44 17.19 21.24 17.80 13.99

Competitive Comparison

For the Auto & Truck Dealerships subindustry, Lithia Motors's ROE %, along with its competitors' market caps and ROE % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Lithia Motors ROE % Distribution

For the Vehicles & Parts industry and Consumer Cyclical sector, Lithia Motors's ROE % distribution charts can be found below:

* The bar in red indicates where Lithia Motors's ROE % falls into.



Lithia Motors ROE % Calculation

Lithia Motors's annualized ROE % for the fiscal year that ended in Dec. 2023 is calculated as

ROE %=Net Income (A: Dec. 2023 )/( (Total Stockholders Equity (A: Dec. 2022 )+Total Stockholders Equity (A: Dec. 2023 ))/ count )
=1000.8/( (5206.2+6213.9)/ 2 )
=1000.8/5710.05
=17.53 %

Lithia Motors's annualized ROE % for the quarter that ended in Dec. 2023 is calculated as

ROE %=Net Income (Q: Dec. 2023 )/( (Total Stockholders Equity (Q: Sep. 2023 )+Total Stockholders Equity (Q: Dec. 2023 ))/ count )
=854/( (5996.4+6213.9)/ 2 )
=854/6105.15
=13.99 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

In the calculation of annual ROE %, the net income of the last fiscal year and the average total shareholder equity over the fiscal year are used. In calculating the quarterly data, the net income data used here is four times the quarterly (Dec. 2023) net income data. ROE % is displayed in the 30-year financial page.


Lithia Motors  (NYSE:LAD) ROE % Explanation

ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.

The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:

ROE %(Q: Dec. 2023 )
=Net Income/Total Stockholders Equity
=854/6105.15
=(Net Income / Revenue )*(Revenue / Total Assets)*(Total Assets / Total Stockholders Equity)
=(854 / 30697.2)*(30697.2 / 18951.15)*(18951.15 / 6105.15)
=Net Margin %*Asset Turnover*Equity Multiplier
=2.78 %*1.6198*3.1041
=ROA %*Equity Multiplier
=4.5 %*3.1041
=13.99 %

With this breakdown, it is clear that if a company grows its Net Profit Margin, its Asset Turnover, or its Leverage, it can grow its ROE %.

The factors that affect a company's ROE % can also be illustrated with the five-step DuPont Analysis:

ROE %(Q: Dec. 2023 )
=Net Income/Total Stockholders Equity
=854/6105.15
=(Net Income / Pre-Tax Income) * (Pre-Tax Income / Operating Income) * (Operating Income / Revenue) * (Revenue / Total Assets) * (Total Assets / Total Stockholders Equity)
= (854 / 1118.8) * (1118.8 / 1921.2) * (1921.2 / 30697.2) * (30697.2 / 18951.15) * (18951.15 / 6105.15)
= Tax Burden * Interest Burden * Operating Margin % * Asset Turnover * Equity Multiplier
= 0.7633 * 0.5823 * 6.26 % * 1.6198 * 3.1041
=13.99 %

Note: The net income data used here is four times the quarterly (Dec. 2023) net income data. The Revenue data used here is four times the quarterly (Dec. 2023) revenue data. The same rule applies to Pre-Tax Income and Operating Income.
* In the five-step DuPont Analysis, Operating Income is only available for non-financial companies. Thus, for Insurance companies, we use EBIT as a substitution of Operating Income. For Banks, both Operating Income and EBIT is unavailable. Thus we combined Interest Burden and Operating Margin % into Pretax Margin %, and the DuPont Analysis is divided into four components instead.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Net Income is used.

Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

Asset light businesses require very few assets to generate very high earnings. Their ROE %s can be extremely high.


Lithia Motors ROE % Related Terms

Thank you for viewing the detailed overview of Lithia Motors's ROE % provided by GuruFocus.com. Please click on the following links to see related term pages.


Lithia Motors (Lithia Motors) Business Description

Traded in Other Exchanges
Address
150 N. Bartlett Street, Medford, OR, USA, 97501
Lithia Motors is a retailer of new and used vehicles and related services. The company offers over 45 brands of vehicles at about 350 stores globally including 28 U.S. states at year-end 2022 and entered Canada in mid-2021 with the purchase of Pfaff Automotive and bought Jardine and soon Pendragon in the U.K. in 2023. The company has expanded largely through the acquisition of dealerships in smaller regional markets but now seeks to grow in any part of the U.S. and we expect more deals over time in the U.S. and abroad. Annual revenue in 2022 was $28.2 billion and we see over $50 billion possible in 2025. In 2022, new-car sales were about 46% of total revenue. Lithia was founded in 1946, went public in 1996, and is now the largest U.S. auto dealer. It is based in Medford, Oregon.
Executives
Shauna Mcintyre director 150 N. BARTLETT STREET, MEDFORD OR 97501
Sidney B Deboer director, officer: Executive Chairman 234 VISTA ST., ASHLAND OR 97520
Bryan B Deboer director, officer: Chief Executive officer 150 N. BARTLETT STREET, MEDFORD OR 97501
Tina Miller officer: VP, CAO & Principal Fin. Off. 150 N. BARTLETT ST., MEDFORD OR 97501
Chris Holzshu officer: Sr. Vice President & CFO 150 N. BARTLETT STREET, MEDFORD OR 97501
David Stork officer: Senior Vice President 150 N. BARTLETT STREET, MEDFORD OR 97501
George N Hines officer: SVP, Chief Tech. & Innov. Off. 150 N. BARTLETT ST., MEDFORD OR 97501
Loretz Congdon Stacy director C/O CORE-MARK HOLDING CO. INC., 395 OYSTER POINT BLVD., SUITE 415, SOUTH SAN FRANCISCO CA 94080
Gary M Glandon officer: Chief People Officer C/O LITHIA MOTORS, INC., 150 NORTH BARTLETT STREET, MEDFORD OR 97501
James E. Lentz director C/O LITHIA MOTORS INC., 150 NORTH BARTLETT STREET, MEDFORD OR 97501
Louis Miramontes director 150 N. BARTLETT ST., MEDFORD OR 97501
Scott Hillier officer: Sr. VP of Operations 150 N. BARTLETT STREET, MEDFORD OR 97501
Kenneth E Roberts director 150 N. BARTLETT ST., MEDFORD OR 97501
Marguerite Celeste officer: Senior Vice President 150 N BARTLETT STREET, MEDFORD OR 97501
Susan O Cain director 150 NORTH BARTLETT STREET, MEDFORD OR 97501