LGI Homes (LGIH)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	2,358,580	2,304,460	3,050,150	2,367,930	1,838,150
Total current assets	US$ in thousands	48,978	31,998	50,514	35,942	38,345
Total current liabilities	US$ in thousands	235,484	365,415	150,781	148,684	130,363
Working capital turnover		—	—	—	—	—

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $2,358,580K ÷ ($48,978K – $235,484K)
= —

LGI Homes Inc's working capital turnover has displayed some fluctuations over the past five years. The ratio declined from 1.24 in 2019 to 0.81 in 2023, representing a decrease in efficiency in managing its working capital during this period. This suggests that the company may be experiencing challenges in effectively utilizing its short-term assets and liabilities to support its operational activities.

The working capital turnover improved slightly in 2022 to 0.88 but remained below the levels seen in 2021 and 2020. This could indicate that LGI Homes Inc made some efforts to enhance its working capital management practices, although there is room for further improvement.

The significant drop in the working capital turnover ratio in 2023 compared to the previous years may raise concerns about the company's ability to efficiently convert its working capital into revenue. This could potentially signal issues related to inventory management, accounts receivable collection, or overall liquidity management within the company.

Overall, LGI Homes Inc's working capital turnover ratio has been inconsistent, and further analysis of the company's working capital components and overall financial performance may be necessary to better understand the factors contributing to these fluctuations.