LGI Homes (LGIH)

Operating return on assets (Operating ROA)

		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
Operating income (ttm)	US$ in thousands	212,146	226,401	228,372	225,937	233,255	214,217	226,518	320,438	390,107	490,613	533,974	520,975	547,698	571,945	511,448	433,275	364,710	283,150	269,734	260,341
Total assets	US$ in thousands	3,758,530	3,825,830	3,701,930	3,522,890	3,407,850	3,335,010	3,139,540	3,100,920	3,124,830	3,112,800	2,873,360	2,594,230	2,351,860	2,153,560	2,058,840	1,825,490	1,826,090	1,762,840	1,636,380	1,719,040
Operating ROA		5.64%	5.92%	6.17%	6.41%	6.84%	6.42%	7.22%	10.33%	12.48%	15.76%	18.58%	20.08%	23.29%	26.56%	24.84%	23.73%	19.97%	16.06%	16.48%	15.14%

December 31, 2024 calculation

Operating ROA = Operating income (ttm) ÷ Total assets
= $212,146K ÷ $3,758,530K
= 5.64%

The operating return on assets (operating ROA) for LGI Homes has shown fluctuations over the periods reported. From March 31, 2020, to December 31, 2021, the operating ROA experienced a steady increase, reaching a peak of 26.56% on September 30, 2021. This upward trend indicates the company was generating more operating income relative to its assets during this period.

However, starting from March 31, 2022, the operating ROA began to decline gradually, dropping to 5.64% by December 31, 2024. This decrease suggests that LGI Homes may be experiencing challenges in generating operating income compared to the size of its asset base.

Overall, the trend in LGI Homes' operating ROA indicates fluctuations in the efficiency of the company's asset utilization and operating performance. It would be essential for the company to closely monitor and address the factors contributing to the declining trend to ensure sustainable profitability and efficient utilization of its assets in the future.