Forensic Analysis · Retail / Consumer Discretionary · as of Nov 9, 2026
Lithia Motors Inc (LAD)
A forensic read on Lithia Motors Inc built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
D · Weak — demands caution
Forensic grade
Grey Zone
Financial health
1.9
Distress distance
Clean
Earnings quality
4
Forensic signals
12.4%
ROE
4.0%
Revenue growth
This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (auditor quality, say on pay, board independence, going concern). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.
Lithia Motors Inc earns a D (Weak — demands caution) forensic quality grade, and its balance-sheet distress test reads 1.9, placing it in the Grey zone. 4 forensic signals were flagged in its latest SEC filings, led by cash conversion.
What the filings flag
0.12×
FY2023–FY2025
Cash conversion.Over FY2023–FY2025, cumulative operating cash flow was 0.12× cumulative net income. Reported profit is not turning into cash. The shortfall is profit tied up in working capital rather than collected — the accrual and receivables lines below show where.Cash conversion: operating cash flow divided by net income, the share of profit that arrived as cash.
17521% of FCF
FY2025
Shareholder returns.Returned $1.0B to shareholders (buybacks + dividends) in FY2025 — 17521% of free cash flow. That is $1.0B (17421%) more than free cash flow covered, and more than operating cash flow as well. The balance sheet covered it: cash fell $60M and total debt rose $1.5B over FY2025. A payout past free cash flow draws the balance sheet down in every year it continues, which isn't sustainable indefinitely. Counting the $60M of stock-based comp paid out in shares on top of that, the combined claim on free cash flow is 18560%.
69d
FY2024→FY2025
Inventory days.Days inventory outstanding moved from 64 to 69 FY2024→FY2025 (against cost of goods sold; inventory +4% vs +4% in cost of sales). Inventory is building a little faster than sales — watch for markdowns.
6.9%
FY2025
Return on invested capital.Return on invested capital is 6.9% in the latest fiscal year and slipping across FY2023–FY2025 from 9.0%. After-tax operating profit was $1.3B in FY2023 and $1.2B in FY2025, with operating income at 5.5% of revenue in FY2023, 4.3% in FY2024 and 4.2% in FY2025. The capital base behind it grew +24% across FY2023–FY2025, from $14.0B to $17.3B, while the return fell 2.1 points, so the dollars added over that window earned less than the 9.0% the older base was already earning.
Key fundamentals
Latest Revenue$37.63B
Revenue Growth YoY+4.0%
Revenue CAGR (2yr)+10.1%
Net Margin2.2%
Free Cash Flow$5.8M
Return on Equity12.4%
Debt / Equity1.49x
The forensic grade and screens above are free — no account needed. Want the AI investment read on top — the 0–100 rating, thesis, bull-vs-bear, red flags and the 12-month scenario, written from Lithia Motors Inc's actual 10-K/10-Q/8-K filings?