LGI Homes (LGIH)

Cash ratio

		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
Cash and cash equivalents	US$ in thousands	53,197	60,903	51,071	48,996	48,978	46,981	43,334	42,966	31,998	52,660	41,971	53,325	50,514	46,717	111,704	48,157	35,942	46,335	49,102	118,232
Short-term investments	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total current liabilities	US$ in thousands	137,926	212,251	272,635	266,026	235,484	341,970	355,130	380,857	365,415	202,395	131,140	109,052	150,781	89,584	120,545	123,556	148,684	78,989	92,582	71,727
Cash ratio		0.39	0.29	0.19	0.18	0.21	0.14	0.12	0.11	0.09	0.26	0.32	0.49	0.34	0.52	0.93	0.39	0.24	0.59	0.53	1.65

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($53,197K + $—K) ÷ $137,926K
= 0.39

The cash ratio of LGI Homes has fluctuated over the past few years based on the provided data. The ratio indicates the company's ability to cover its current liabilities using its cash and cash equivalents.

The analysis reveals that the cash ratio was relatively strong at the beginning of the observation period in March 2020 at 1.65, indicating the company had sufficient cash to cover its short-term obligations. However, the ratio decreased significantly in December 2020 to 0.24, possibly indicating a reduction in cash reserves or an increase in current liabilities.

From June 2021 to September 2021, there was an uptrend in the cash ratio, reaching 0.93 in June 2021, signaling an improvement in the company's liquidity position. Subsequently, the ratio declined but remained relatively stable around 0.32 to 0.52 until December 2022.

The cash ratio dropped notably to 0.09 in December 2022, which could suggest potential liquidity challenges or increased short-term obligations. However, the ratio gradually recovered in the following quarters, reaching 0.39 by December 2024.

Overall, the fluctuating trend in LGI Homes' cash ratio indicates varying levels of liquidity and ability to meet short-term obligations over the observed period. It is essential for the company to monitor and manage its cash position effectively to ensure stability in its financial health.