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).
雖然一些投資者已經熟悉金融指標 (說白了)，但本文是爲那些想學習回報率 (ROE) 以及它爲何重要的人準備的。通過學習實踐，我們將研究ROE，以更好地了解利西亞車行公司(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或權益回報率是評估公司有效利用股東投資產生回報效率的有用工具。簡而言之，roe顯示每個股東投資所產生的利潤。
How Do You Calculate Return On Equity?
怎樣計算ROE?
The formula for return on equity is:
權益回報率的計算公式是：
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
淨資產收益率 = 淨利潤（從持續經營中獲得）÷ 股東權益
So, based on the above formula, the ROE for Lithia Motors is:
因此，根據上面的公式，利西亞車行的ROE爲：
15% = US$947m ÷ US$6.4b (Based on the trailing twelve months to March 2024).
15% = US$ 94700萬 ÷ US$ 64億(截至2024年3月的過去十二個月)。
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.
'回報'是過去十二個月稅後賺取的金額。換句話說，對於每一美元的股權，公司能夠賺取0.15美元的利潤。
Does Lithia Motors Have A Good Return On Equity?
利西亞車行的ROE表現如何？
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.
判斷一家公司的ROE是否良好的一種簡單方法是將其與行業平均值進行比較。但是，這種方法僅適用於粗略檢查，因爲即使是在同一行業分類中，公司之間也會有很大差異。如下圖所示，Lithia Motors的ROE低於專業零售行業板塊的平均水平(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.
不幸的是這是次優的。儘管我們認爲較低的ROE仍可能意味着公司可以通過槓桿放大收益，前提是其現有的債務水平較低。高債務企業的低ROE是一個完全不同的故事，也是一項風險投資。
How Does Debt Impact Return On Equity?
債務如何影響股東回報率？
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.
公司通常需要投資資金來增加利潤。這些資金可以來自股票發行、留存收益或債務。在前兩種情況下，ROE將捕捉到這種使用資本創造增長的情況。在後一種情況下，用於增長的債務將提高回報率，但不會影響總股本。這將使ROE看起來比沒有使用債務要好。
Combining Lithia Motors' Debt And Its 15% Return On Equity
結合利西亞車行的債務和其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.
利西亞車行確實使用了大量的債務來增加回報。它的資產負債比爲1.95。雖然其ROE令人滿意，但值得記住的是，公司可以使用的債務數量通常是有限的。債務增加了風險並減少了公司未來的選擇，因此您通常希望看到使用它獲得一些良好回報。
Conclusion
結論
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是我們可以比較不同公司業務質量的一種方式。能夠在不太依賴債務的情況下實現高ROE的公司通常是高品質的。如果兩家公司的ROE相同，則通常會更喜歡債務較少的那家公司。
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，當一個公司業務高品質時，市場通常會將其推高到反映這一點的價格。應該考慮利潤增長的速度，相對於當前價格反映的利潤增長預期的速度。因此，您可能希望檢查這家公司的分析師預測的免費可視化效果。
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.
當然，利西亞車行可能不是最佳的股票購買選擇。因此，您可能希望查看這個免費收藏，其中包括具有高ROE和低債務的其他公司。
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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.
對本文有反饋？關注內容？請直接與我們聯繫。或者，發送電子郵件至editorial-team@simplywallst.com。
這篇文章是Simply Wall St的一般性文章。我們根據歷史數據和分析師預測提供評論，只使用公正的方法論，我們的文章並不意味着提供任何金融建議。文章不構成買賣任何股票的建議，也不考慮您的目標或您的財務狀況。我們的目標是帶給您基本數據驅動的長期關注分析。請注意，我們的分析可能不考慮最新的價格敏感公司公告或定性材料。Simply Wall St沒有任何股票頭寸。
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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