LGI Homes (LGIH)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 3,758,530 | 3,407,850 | 3,124,830 | 2,351,860 | 1,826,090 |
| Total stockholders’ equity | US$ in thousands | 2,037,230 | 1,856,030 | 1,642,410 | 1,395,850 | 1,139,000 |
| Financial leverage ratio | 1.84 | 1.84 | 1.90 | 1.68 | 1.60 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,758,530K ÷ $2,037,230K
= 1.84
The financial leverage ratio of LGI Homes has shown a slight upward trend over the past five years, increasing from 1.60 in December 31, 2020, to 1.84 in December 31, 2024. This suggests that the company has been relying more on debt to finance its operations and investments. While a higher leverage ratio can magnify returns on equity investment, it also increases the financial risk as it indicates a higher proportion of debt in the company's capital structure. LGI Homes should carefully monitor its leverage ratio to ensure it remains at a manageable level that does not compromise the company's financial stability.
Peer comparison
Dec 31, 2024