LGI Homes (LGIH)

Quick ratio

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cash	US$ in thousands	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	38,345	37,030	37,555	35,084
Short-term investments	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Receivables	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total current liabilities	US$ in thousands	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	130,363	107,782	95,902	51,794
Quick ratio		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	0.29	0.34	0.39	0.68

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($48,978K + $—K + $—K) ÷ $235,484K
= 0.21

The quick ratio of LGI Homes Inc has shown some fluctuations over the past eight quarters. The quick ratio measures the company's ability to meet its short-term obligations with its most liquid assets. A quick ratio below 1 indicates the company may have difficulty meeting its short-term liabilities.

Looking at the trend, the quick ratio has been below 1 for all the quarters provided. This suggests that LGI Homes Inc may have limited ability to cover its current liabilities with its quick assets alone.

In the latest quarter, Q4 2023, the quick ratio improved to 0.32 from the previous quarter's 0.25. However, it remains below 0.5, indicating a continued weakness in the company's short-term liquidity position.

It is worth noting that in Q1 and Q2 of 2022, the quick ratio was relatively higher at 0.63 and 0.47 respectively, which may indicate that the company had better liquidity at that time. However, the quick ratio has been on a declining trend since then.

In conclusion, LGI Homes Inc's quick ratio has fluctuated over the past eight quarters, consistently remaining below 1. This suggests a potential liquidity challenge in meeting short-term obligations with quick assets alone. Further monitoring of the company's liquidity position and management of its current assets and liabilities may be necessary to ensure financial stability.