LGI Homes (LGIH)

Days of inventory on hand (DOH)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Inventory turnover		0.49	0.50	0.50	0.53	0.58	0.57	0.58	0.58	0.57	0.65	0.77	0.90	1.07	1.20	1.23	1.20	1.12	1.02	1.06	1.03
DOH	days	740.76	736.26	731.98	682.35	624.48	642.06	631.31	633.84	638.10	563.58	476.36	405.22	341.09	303.23	297.73	304.00	324.60	359.04	345.25	353.84

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 0.49
= 740.76

The days of inventory on hand (DOH) for LGI Homes have shown fluctuations over the periods indicated. The DOH metric reflects the number of days it takes for the company to sell its inventory.

From March 31, 2020, to December 31, 2020, the DOH decreased from 353.84 days to 324.60 days, indicating an improvement in inventory turnover. However, in the subsequent periods, the DOH began to increase, reaching a peak of 740.76 days on December 31, 2024.

The increasing trend in DOH from June 2021 to December 2024 suggests that the company may be facing challenges in effectively managing its inventory levels or experiencing slower sales relative to the amount of inventory on hand. A high DOH value can indicate potential risks such as obsolete inventory, overstocking, or declining demand.

It is essential for LGI Homes to closely monitor and optimize its inventory management practices to ensure efficient utilization of resources and maintain healthy profitability levels. Periodic reviews of inventory levels, demand forecasting, and supply chain efficiency could help address the challenges indicated by the increasing DOH trend.