LGI Homes (LGIH)

Inventory turnover

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	2,158,425	2,042,911	1,960,145	1,944,024	1,933,048	2,056,249	2,153,071	2,166,441	2,232,115	2,296,825	2,146,477	1,932,673	1,764,832	1,574,198	1,541,658	1,528,548	1,401,675	1,259,842	1,176,446	1,136,009
Inventory	US$ in thousands	3,107,650	3,056,970	2,889,110	2,880,520	2,898,300	2,871,900	2,633,710	2,335,570	2,085,900	1,908,140	1,750,860	1,609,690	1,569,490	1,548,510	1,458,260	1,481,830	1,499,620	1,480,630	1,328,700	1,290,860
Inventory turnover		0.69	0.67	0.68	0.67	0.67	0.72	0.82	0.93	1.07	1.20	1.23	1.20	1.12	1.02	1.06	1.03	0.93	0.85	0.89	0.88

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $2,158,425K ÷ $3,107,650K
= 0.69

Based on the data provided, the inventory turnover for LGI Homes Inc has remained relatively consistent over the past eight quarters, ranging from 0.57 to 0.90. The inventory turnover ratio indicates how efficiently the company is managing its inventory by measuring how many times a company's inventory is sold and replaced over a specific period.

The general trend shows a gradual decrease in inventory turnover from Q1 2022 to Q1 2023, with a slight rebound in the most recent quarter. A lower inventory turnover ratio may indicate overstocking or slow-moving inventory, leading to potential storage costs and decreased liquidity. On the other hand, a higher ratio signifies efficient inventory management and quicker sales.

LGI Homes Inc's inventory turnover ratios around 0.58 to 0.65 in recent quarters suggest that the company may need to focus on optimizing inventory levels and sales strategies to improve efficiency and profitability. Further analysis and comparison with industry benchmarks could provide additional insights into the company's inventory management performance.