LGI Homes (LGIH)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	2,158,420	1,933,050	2,232,120	1,764,830	1,401,680
Inventory	US$ in thousands	3,107,650	2,898,300	2,085,900	1,569,490	1,499,620
Inventory turnover		0.69	0.67	1.07	1.12	0.93

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $2,158,420K ÷ $3,107,650K
= 0.69

The inventory turnover ratio for LGI Homes Inc has fluctuated over the past five years. In 2023, the ratio was 0.58, which indicates that the company turned over its inventory approximately 0.58 times during the year. This represents a decrease from the previous year, where the ratio was 0.57.

Comparing these figures to 2021 and 2020, LGI Homes had higher inventory turnover ratios of 1.07 and 1.12, respectively. This suggests that the company was more efficient in managing its inventory during those years, as it turned over its inventory more frequently.

However, in 2019, the inventory turnover ratio dropped to 0.93, indicating a decrease in inventory turnover efficiency compared to 2020 and 2021. Overall, the trend in inventory turnover for LGI Homes Inc has shown some fluctuations in recent years. It is important for the company to closely monitor its inventory management practices to ensure optimal efficiency and profitability.