LGI Homes (LGIH)
Cash conversion cycle
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 740.76 | 736.26 | 731.98 | 682.35 | 624.48 | 642.06 | 631.31 | 633.84 | 638.10 | 563.58 | 476.36 | 405.22 | 341.09 | 303.23 | 297.73 | 304.00 | 324.60 | 359.04 | 345.25 | 353.84 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 740.76 | 736.26 | 731.98 | 682.35 | 624.48 | 642.06 | 631.31 | 633.84 | 638.10 | 563.58 | 476.36 | 405.22 | 341.09 | 303.23 | 297.73 | 304.00 | 324.60 | 359.04 | 345.25 | 353.84 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 740.76 + — – —
= 740.76
The cash conversion cycle for LGI Homes has fluctuated over the years, indicating varying efficiency in managing its operating cycle. The company's cash conversion cycle peaked at 740.76 days as of December 31, 2024, which suggests the company took longer to convert its investments in inventory into cash during that period.
It is notable that the cash conversion cycle experienced a significant increase from March 31, 2024, to December 31, 2024, indicating potential challenges in managing working capital efficiently during that period.
Overall, LGI Homes should focus on optimizing its cash conversion cycle by streamlining its inventory management, improving accounts receivable collection processes, and extending accounts payable when feasible. By reducing the cash conversion cycle, the company can enhance its financial health and operational efficiency.
Peer comparison
Dec 31, 2024