LGI Homes (LGIH)

Current 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
Total current assets	US$ in thousands	3,469,770	3,549,590	3,454,550	3,305,250	3,197,940	3,139,600	2,980,610	2,945,360	2,955,440	2,962,010	2,727,780	2,437,380	2,194,330	2,004,020	1,932,090	1,717,080	1,721,370	1,656,860	1,565,590	1,645,070
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
Current ratio		25.16	16.72	12.67	12.42	13.58	9.18	8.39	7.73	8.09	14.63	20.80	22.35	14.55	22.37	16.03	13.90	11.58	20.98	16.91	22.94

December 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $3,469,770K ÷ $137,926K
= 25.16

The current ratio of LGI Homes has shown fluctuations over the past few years, ranging from as low as 7.73 to as high as 25.16. The current ratio measures the company's ability to cover its short-term liabilities with its current assets. A higher current ratio indicates a stronger liquidity position, as the company has more current assets to cover its current liabilities.

LGI Homes saw its current ratio peak at 25.16 on December 31, 2024, suggesting a robust ability to meet its short-term obligations at that point in time. However, the current ratio declined in the following periods, indicating a potential decrease in liquidity. It hit a low point of 7.73 on March 31, 2023, which may suggest challenges in meeting short-term obligations with current assets during that period.

Overall, it is important for LGI Homes to maintain a healthy current ratio to ensure it can meet its short-term financial obligations and manage its working capital effectively. Fluctuations in the current ratio can be normal based on the company's operating cycle and financial activities, but consistent monitoring and management of liquidity are essential for financial stability.