LGI Homes (LGIH)

Return on assets (ROA)

		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
Net income (ttm)	US$ in thousands	199,227	181,253	204,601	274,843	326,567	403,755	413,915	408,673	429,645	454,770	443,224	380,714	323,895	252,337	212,682	203,113	178,608	156,391	144,765	146,318
Total assets	US$ in thousands	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	1,666,120	1,636,190	1,486,060	1,436,200
ROA		5.85%	5.43%	6.52%	8.86%	10.45%	12.97%	14.41%	15.75%	18.27%	21.12%	21.53%	20.86%	17.74%	14.31%	13.00%	11.82%	10.72%	9.56%	9.74%	10.19%

December 31, 2023 calculation

ROA = Net income (ttm) ÷ Total assets
= $199,227K ÷ $3,407,850K
= 5.85%

The return on assets (ROA) for LGI Homes Inc has been on a declining trend over the past eight quarters. The ROA decreased from 15.75% in Q1 2022 to 5.85% in Q4 2023. This indicates that the company's ability to generate profits from its assets has been decreasing over time.

The ROA was relatively high in the earlier periods (Q1 2022 to Q2 2022), ranging from 14.41% to 15.75%. However, there was a noticeable drop in ROA starting from Q3 2022, with consecutive decreases in each subsequent quarter.

This declining trend in ROA could suggest that LGI Homes Inc may be facing challenges in effectively utilizing its assets to generate profits. It may also indicate potential inefficiencies in the company's operations or a decrease in profitability relative to the size of its asset base.

Further analysis and investigation into the factors contributing to the decreasing ROA trend would be necessary to determine the underlying causes and potential strategies for improvement in the company's asset management and profitability.