LAD (Lithia Motors) Interest Coverage : 1.99 (As of Sep. 2024)

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What is Lithia Motors Interest Coverage?

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. Lithia Motors's Operating Income for the three months ended in Sep. 2024 was $382 Mil. Lithia Motors's Interest Expense for the three months ended in Sep. 2024 was $-192 Mil. Lithia Motors's interest coverage for the quarter that ended in Sep. 2024 was 1.99. The higher the ratio, the stronger the company's financial strength is.

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

LAD' s Interest Coverage Range Over the Past 10 Years
Min: 3.16 Med: 6.75 Max: 13.14
Current: 3.16

LAD's Interest Coverage is ranked worse than
70.36% of 1029 companies
in the Vehicles & Parts industry
Industry Median: 7.94 vs LAD: 3.16

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Lithia Motors Interest Coverage Historical Data

The historical data trend for Lithia Motors's Interest Coverage 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.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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Lithia Motors Interest Coverage Chart

Lithia Motors Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

Get a 7-Day Free Trial

3.66

6.38

13.14

11.19

4.84

Lithia Motors Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
Interest Coverage	Get a 7-Day Free Trial															2.93	-	1.68	2.82	1.99

Competitive Comparison of Lithia Motors's Interest Coverage

For the Auto & Truck Dealerships subindustry, Lithia Motors's Interest Coverage, along with its competitors' market caps and Interest Coverage 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's Interest Coverage Distribution in the Vehicles & Parts Industry

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

* The bar in red indicates where Lithia Motors's Interest Coverage falls into.

Lithia Motors Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Lithia Motors's Interest Coverage for the fiscal year that ended in Dec. 2023 is calculated as

Here, for the fiscal year that ended in Dec. 2023, Lithia Motors's Interest Expense was $-352 Mil. Its Operating Income was $1,704 Mil. And its Long-Term Debt & Capital Lease Obligation was $7,583 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	1704.2	/	-352.1
	=	4.84

Lithia Motors's Interest Coverage for the quarter that ended in Sep. 2024 is calculated as

Here, for the three months ended in Sep. 2024, Lithia Motors's Interest Expense was $-192 Mil. Its Operating Income was $382 Mil. And its Long-Term Debt & Capital Lease Obligation was $8,809 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Sep. 2024 )	/	Interest Expense (Q: Sep. 2024 )
	=	-1	*	382.3	/	-192.3
	=	1.99

The higher the ratio, the stronger the company's Financial Strength is.

Lithia Motors (NYSE:LAD) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

Lithia Motors Interest Coverage Related Terms

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

Lithia Motors Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Lithia Motors Inc (NYSE:LAD) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

LMO:Germany LMO:Germany

Address

150 N. Bartlett Street, Medford, OR, USA, 97501

Website

https://www.lithia.com

Lithia Motors is a retailer of new and used vehicles and related services. The company offers over 50 brands of vehicles at nearly 500 stores globally across the US, Canada, and UK. The company has expanded largely through the acquisition of dealerships in smaller regional markets but now seeks to grow in any part of the US and we expect more deals over time in the US and, at times, abroad. Annual revenue in 2023 was $31 billion and we see over $50 billion possible in a few years. The US was 90% of 2023 revenue and the UK second at 6%, the latter should rise to around 20% with the 2024 Pendragon acquisition. In 2023, new-car sales were about 49% of total revenue. Lithia was founded in 1946, went public in 1996, and is the largest US auto dealer. It is based in Medford, Oregon.

Executives

Tina Miller	officer: VP, CAO & Principal Fin. Off.	150 N. BARTLETT ST., MEDFORD OR 97501
Bryan B Deboer	director, officer: Chief Executive officer	150 N. BARTLETT STREET, MEDFORD OR 97501
Gary M Glandon	officer: Chief People Officer	C/O LITHIA MOTORS, INC., 150 NORTH BARTLETT STREET, MEDFORD OR 97501
Louis Miramontes	director	150 N. BARTLETT ST., MEDFORD OR 97501
Shauna Mcintyre	director	150 N. BARTLETT STREET, MEDFORD OR 97501
Chris Holzshu	officer: Sr. Vice President & CFO	150 N. BARTLETT STREET, MEDFORD OR 97501
Sidney B Deboer	director, officer: Executive Chairman	234 VISTA ST., ASHLAND OR 97520
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
James E. Lentz	director	C/O LITHIA MOTORS INC., 150 NORTH BARTLETT STREET, 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