Lithia Motors, Inc. (NYSE:LAD) Delivered A Weaker ROE Than Its Industry
Lithia Motors, Inc. (NYSE:LAD) Delivered A Weaker ROE Than Its Industry
While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. By way of learning-by-doing, we'll look at ROE to gain a better understanding of Lithia Motors, Inc. (NYSE:LAD).
虽然一些投资者已经熟悉金融指标 (说白了)，但本文是为那些想学习回报率 (ROE) 以及它为何重要的人准备的。通过学习实践，我们将研究ROE，以更好地了解利西亚车行公司(NYSE:LAD)。
ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.
roe或权益回报率是评估公司有效利用股东投资产生回报效率的有用工具。简而言之，roe显示每个股东投资所产生的利润。
How Do You Calculate Return On Equity?
怎样计算ROE?
The formula for return on equity is:
权益回报率的计算公式是：
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
净资产收益率 = 净利润（从持续经营中获得）÷ 股东权益
So, based on the above formula, the ROE for Lithia Motors is:
因此，根据上面的公式，利西亚车行的ROE为：
15% = US$947m ÷ US$6.4b (Based on the trailing twelve months to March 2024).
15% = US$ 94700万 ÷ US$ 64亿(截至2024年3月的过去十二个月)。
The 'return' is the amount earned after tax over the last twelve months. Another way to think of that is that for every $1 worth of equity, the company was able to earn $0.15 in profit.
'回报'是过去十二个月税后赚取的金额。换句话说，对于每一美元的股权，公司能够赚取0.15美元的利润。
Does Lithia Motors Have A Good Return On Equity?
利西亚车行的ROE表现如何？
One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification. As is clear from the image below, Lithia Motors has a lower ROE than the average (19%) in the Specialty Retail industry.
判断一家公司的ROE是否良好的一种简单方法是将其与行业平均值进行比较。但是，这种方法仅适用于粗略检查，因为即使是在同一行业分类中，公司之间也会有很大差异。如下图所示，Lithia Motors的ROE低于专业零售行业板块的平均水平(19%)。
Unfortunately, that's sub-optimal. Although, we think that a lower ROE could still mean that a company has the opportunity to better its returns with the use of leverage, provided its existing debt levels are low. A high debt company having a low ROE is a different story altogether and a risky investment in our books.
不幸的是这是次优的。尽管我们认为较低的ROE仍可能意味着公司可以通过杠杆放大收益，前提是其现有的债务水平较低。高债务企业的低ROE是一个完全不同的故事，也是一项风险投资。
How Does Debt Impact Return On Equity?
债务如何影响股东回报率？
Companies usually need to invest money to grow their profits. That cash can come from issuing shares, retained earnings, or debt. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. That will make the ROE look better than if no debt was used.
公司通常需要投资资金来增加利润。这些资金可以来自股票发行、留存收益或债务。在前两种情况下，ROE将捕捉到这种使用资本创造增长的情况。在后一种情况下，用于增长的债务将提高回报率，但不会影响总股本。这将使ROE看起来比没有使用债务要好。
Combining Lithia Motors' Debt And Its 15% Return On Equity
结合利西亚车行的债务和其15%的ROE
Lithia Motors does use a high amount of debt to increase returns. It has a debt to equity ratio of 1.95. While its ROE is respectable, it is worth keeping in mind that there is usually a limit as to how much debt a company can use. Debt increases risk and reduces options for the company in the future, so you generally want to see some good returns from using it.
利西亚车行确实使用了大量的债务来增加回报。它的资产负债比为1.95。虽然其ROE令人满意，但值得记住的是，公司可以使用的债务数量通常是有限的。债务增加了风险并减少了公司未来的选择，因此您通常希望看到使用它获得一些良好回报。
Conclusion
结论
Return on equity is one way we can compare its business quality of different companies. Companies that can achieve high returns on equity without too much debt are generally of good quality. If two companies have the same ROE, then I would generally prefer the one with less debt.
ROE是我们可以比较不同公司业务质量的一种方式。能够在不太依赖债务的情况下实现高ROE的公司通常是高品质的。如果两家公司的ROE相同，则通常会更喜欢债务较少的那家公司。
But when a business is high quality, the market often bids it up to a price that reflects this. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. So you might want to check this FREE visualization of analyst forecasts for the company.
但是，当一个公司业务高品质时，市场通常会将其推高到反映这一点的价格。应该考虑利润增长的速度，相对于当前价格反映的利润增长预期的速度。因此，您可能希望检查这家公司的分析师预测的免费可视化效果。
Of course Lithia Motors may not be the best stock to buy. So you may wish to see this free collection of other companies that have high ROE and low debt.
当然，利西亚车行可能不是最佳的股票购买选择。因此，您可能希望查看这个免费收藏，其中包括具有高ROE和低债务的其他公司。
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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