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Lithia Motors Financial Strength

: 6 (As of Jun. 2022)
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Lithia Motors has the Financial Strength Rank of 6.

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors:

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.

Lithia Motors's Interest Coverage for the quarter that ended in Jun. 2022 was 13.67. Lithia Motors's debt to revenue ratio for the quarter that ended in Jun. 2022 was 0.23. As of today, Lithia Motors's Altman Z-Score is 3.57.


Competitive Comparison

For the Auto & Truck Dealerships subindustry, Lithia Motors's Financial Strength, along with its competitors' market caps and Financial Strength 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 Financial Strength Distribution

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

* The bar in red indicates where Lithia Motors's Financial Strength falls into.



Lithia Motors Financial Strength Calculation

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.

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

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:

Lithia Motors's Interest Expense for the months ended in Jun. 2022 was $-38 Mil. Its Operating Income for the months ended in Jun. 2022 was $524 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Jun. 2022 was $5,072 Mil.

Lithia Motors's Interest Coverage for the quarter that ended in Jun. 2022 is

Interest Coverage=-1*Operating Income (Q: Jun. 2022 )/Interest Expense (Q: Jun. 2022 )
=-1*523.7/-38.3
=13.67

The higher the ratio, the stronger the company's financial strength is.

2. Debt to revenue ratio. The lower, the better.

Lithia Motors's Debt to Revenue Ratio for the quarter that ended in Jun. 2022 is

Debt to Revenue Ratio=Total Debt (Q: Jun. 2022 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(1591.3 + 5071.7) / 28960.4
=0.23

3. Altman Z-Score.

Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

The zones of discrimination were as such:

When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.

Lithia Motors has a Z-score of 3.57, indicating it is in Safe Zones. This implies the Z-Score is strong.

Good Sign:

Altman Z-score of 3.57 is strong.

* 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.


Lithia Motors  (NYSE:LAD) Financial Strength Explanation

The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations. Companies with rank of 3 or less are likely in financial distress.

Lithia Motors has the Financial Strength Rank of 6.


Lithia Motors Financial Strength Related Terms

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


Lithia Motors Business Description

Lithia Motors logo
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 40 brands of vehicles at 278 stores in 25 states at year-end 2021 and entered Canada in mid-2021 with the purchase of Pfaff Automotive. 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 Canada or perhaps Europe. Annual revenue in 2021 was $22.8 billion and we see over $50 billion possible in 2025. In 2021, new-car sales were about 49% of total revenue. Lithia was founded in 1946, went public in 1996, and is now one of the largest U.S. auto dealerships. It is based in Medford, Oregon.
Executives
Celeste Marguerite officer: Senior Vice President 150 N BARTLETT STREET MEDFORD OR 97501
Stork David officer: Senior Vice President 150 N. BARTLETT STREET MEDFORD OR 97501
Abrams David C 10 percent owner 222 BERKELEY STREET, 21ST FLOOR BOSTON MA 02116
Abrams Capital Management, Llc 10 percent owner 222 BERKELEY STREET, 21ST FLOOR BOSTON MA 02116
Abrams Capital Management, L.p. 10 percent owner 222 BERKELEY STREET, 21ST FLOOR BOSTON MA 02116
Abrams Capital, Llc 10 percent owner 222 BERKELEY ST., 21ST FLOOR BOSTON MA 02116
Hines George N officer: SVP, Chief Tech. & Innov. Off. 150 N. BARTLETT ST. MEDFORD OR 97501
Mcintyre Shauna director 150 N. BARTLETT STREET MEDFORD OR 97501
Miller Tina officer: VP, CAO & Principal Fin. Off. 150 N. BARTLETT ST. MEDFORD OR 97501
Lewis Erik officer: Senior VP & Chief HR Officer 150 N. BARTLETT STREET MEDFORD OR 97501
Robino David J director 7159 PINE RIDGE DR MEDFORD OR 97504
Miramontes Louis director 150 N. BARTLETT ST. MEDFORD OR 97501
Dobry Thomas officer: Chief Marketing Officer 1725 BRISTOL ST. ASHLAND OR 97520
Lam Shau-wai director 955 ROUTE 9 NORTH SOUTH AMBOY NJ 08879
Liang George Chun-wai officer: Senior Vice President 107 BELLEVUE AVENUE SUMMIT NJ 07901

Lithia Motors Headlines

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