LGI Homes (LGIH)
Operating return on assets (Operating ROA)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 212,146 | 233,255 | 390,107 | 547,698 | 364,710 |
| Total assets | US$ in thousands | 3,758,530 | 3,407,850 | 3,124,830 | 2,351,860 | 1,826,090 |
| Operating ROA | 5.64% | 6.84% | 12.48% | 23.29% | 19.97% |
December 31, 2024 calculation
Operating ROA = Operating income ÷ Total assets
= $212,146K ÷ $3,758,530K
= 5.64%
The operating return on assets (Operating ROA) for LGI Homes has shown some fluctuation over the years based on the provided data. In 2020, the Operating ROA was 19.97%, reflecting a strong performance in generating operating income relative to its asset base. This increased further to 23.29% by the end of 2021, indicating an improvement in the company's operational efficiency and profitability.
However, there was a notable decline in Operating ROA in 2022, dropping to 12.48%. This could suggest a decrease in the company's ability to generate earnings from its assets or efficiency in utilizing its resources effectively. The trend continued in 2023, with Operating ROA falling to 6.84%, indicating potential challenges in optimizing operational performance.
By the end of 2024, the Operating ROA decreased further to 5.64%, signaling a continued decline in the company's ability to generate operating income relative to its asset base. This may raise concerns about LGI Homes' operational efficiency and profitability in that period.
Overall, the analysis of LGI Homes' Operating ROA highlights the importance of monitoring this ratio as it provides insights into the company's ability to generate profits from its assets and manage its operational performance effectively.
Peer comparison
Dec 31, 2024