LGI Homes (LGIH)

Short-term

Turnover ratios

Based on the provided data, LGI Homes' inventory turnover has shown a slight decline over the years, from 1.12 in 2020 to 0.49 in 2024. This indicates that the company is taking longer to sell its inventory, which could potentially lead to excess inventory levels or inefficiencies in managing inventory.

The receivables turnover ratio is not available for analysis as there is no data provided for receivables turnover for any of the years.

Similarly, the payables turnover ratio is not available for analysis as there is no data provided for payables turnover for any of the years.

In terms of working capital turnover, LGI Homes' performance has also decreased over the years, indicating that the company is generating less revenue for each dollar of working capital employed. This trend suggests potential inefficiencies in the utilization of working capital resources.

Overall, LGI Homes' activity ratios suggest potential areas for improvement in managing inventory levels, working capital efficiency, and possibly in the management of receivables and payables, although more detailed financial information is needed to provide a comprehensive analysis.

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Average number of days

LGI Homes' activity ratios provide insights into the efficiency of the company's operations.

1. Days of Inventory on Hand (DOH):
- LGI Homes' days of inventory on hand have increased from 324.60 days in 2020 to 740.76 days in 2024. This indicates that the company is holding inventory for a longer period, which may suggest potential issues with inventory management and sales forecasting.

2. Days of Sales Outstanding (DSO):
- The data provided does not include information on LGI Homes' days of sales outstanding (DSO). Typically, DSO measures how quickly a company collects its accounts receivable, reflecting its ability to convert sales into cash.

3. Number of Days of Payables:
- Similarly, data is not available for LGI Homes' number of days of payables, which would have indicated how long the company takes to pay its outstanding bills to suppliers. This metric is important for assessing the company's payment policies and supplier relationships.

Overall, based on the information provided, LGI Homes' inventory management may warrant closer attention due to the increasing trend in days of inventory on hand. Additional data on DSO and payables would provide a more complete picture of the company's operational efficiency and cash flow management.

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Long-term

LGI Homes' long-term activity ratios have shown a significant decline over the years based on the provided data. The Fixed Asset Turnover, which measures the efficiency of the company in generating sales revenue from its investment in fixed assets, has decreased notably from 654.49 in December 2020 to 69.84 in December 2022. This indicates a decrease in the company's ability to efficiently utilize its fixed assets to generate sales.

Similarly, the Total Asset Turnover, which reflects the company's effectiveness in generating sales revenue relative to its total assets, has declined from 1.30 in December 2020 to 0.59 in December 2024. This declining trend suggests that LGI Homes is becoming less efficient in utilizing its total assets to generate sales revenue over time.

Overall, the decreasing trend in both Fixed Asset Turnover and Total Asset Turnover ratios may indicate inefficiencies in asset utilization, potentially signaling underlying operational or management issues that require further investigation and management attention.