LGI Homes (LGIH)

Working capital turnover

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Revenue US$ in thousands 2,202,600 2,358,580 2,304,460 3,050,150 2,367,930
Total current assets US$ in thousands 3,469,770 3,197,940 2,955,440 2,194,330 1,721,370
Total current liabilities US$ in thousands 137,926 235,484 365,415 150,781 148,684
Working capital turnover 0.66 0.80 0.89 1.49 1.51

December 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $2,202,600K ÷ ($3,469,770K – $137,926K)
= 0.66

LGI Homes' working capital turnover has exhibited a downward trend over the past five years, declining from 1.51 in December 31, 2020, to 0.66 in December 31, 2024. This indicates that the company's efficiency in generating revenue from its working capital has decreased over time. A lower working capital turnover suggests that LGI Homes may be facing challenges in effectively utilizing its working capital to support its operations and generate sales. It may be necessary for the company to review its working capital management strategies to improve efficiency and maximize profitability in the future.