LGI Homes (LGIH)

Fixed asset turnover

		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
Revenue (ttm)	US$ in thousands	2,502,048	2,553,066	2,518,751	2,561,524	2,358,580	2,238,428	2,167,963	2,245,762	2,304,455	2,617,269	2,821,803	2,890,246	3,050,149	3,146,471	2,929,065	2,619,155	2,367,929	2,076,180	2,025,059	2,005,287
Property, plant and equipment	US$ in thousands	—	—	—	—	—	—	37,786	35,273	32,997	26,051	20,311	19,420	16,944	13,364	13,270	6,160	3,618	2,284	1,876	1,888
Fixed asset turnover		—	—	—	—	—	—	57.37	63.67	69.84	100.47	138.93	148.83	180.01	235.44	220.73	425.19	654.49	909.01	1,079.46	1,062.12

December 31, 2024 calculation

Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $2,502,048K ÷ $—K
= —

Fixed asset turnover is a financial ratio that measures a company's efficiency in generating revenue from its investment in fixed assets. In the case of LGI Homes, the fixed asset turnover ratio has shown a declining trend over the past few years.

From March 31, 2020, to June 30, 2022, the fixed asset turnover ratio decreased significantly from 1,062.12 to 138.93, indicating a decreasing ability to generate sales from fixed assets. This may suggest that LGI Homes is not effectively utilizing its fixed assets to drive revenue growth during this period.

The ratio continued to decrease to 57.37 by June 30, 2023, and later dropped to 63.67 by March 31, 2023, indicating a persistent decline in efficiency in generating sales from fixed assets. This downward trend could be a cause for concern as it may indicate inefficiencies in the company's operations or a need for better asset management strategies.

As of the most recent data available, the fixed asset turnover ratio is 69.84 as of December 31, 2022, which is still significantly lower compared to the starting point in 2020. It is important for LGI Homes to closely monitor and address this trend to ensure optimal utilization of its fixed assets and improve overall operational efficiency.