M/I Homes Inc (MHO)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 4,504,670 | 4,033,500 | 4,131,390 | 3,745,890 | 3,046,140 |
| Total current assets | US$ in thousands | 4,196,970 | 3,706,280 | 3,382,680 | 2,964,460 | 2,411,710 |
| Total current liabilities | US$ in thousands | 198,579 | 289,806 | 228,597 | 244,505 | 185,669 |
| Working capital turnover | 1.13 | 1.18 | 1.31 | 1.38 | 1.37 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $4,504,670K ÷ ($4,196,970K – $198,579K)
= 1.13
The working capital turnover ratio for M/I Homes Inc has shown a mixed trend over the past five years. It increased slightly from 1.37 in December 31, 2020, to 1.38 in December 31, 2021, indicating that the company was able to generate more revenue per dollar of working capital during that period. However, the ratio declined in the following years, reaching 1.13 by December 31, 2024.
A working capital turnover ratio of less than 1 means that the company is not efficiently utilizing its working capital to generate sales revenue. In M/I Homes Inc's case, the ratios above 1 indicate that the company is able to generate more sales revenue relative to its working capital, which is a positive sign.
The decreasing trend in the working capital turnover ratio from 2022 to 2024 may suggest that M/I Homes Inc's efficiency in utilizing its working capital to generate sales revenue has declined over this period. This could be due to various factors such as changes in operational efficiency, inventory management, or sales strategies.
Overall, a decreasing trend in the working capital turnover ratio should be carefully monitored, as it could indicate potential inefficiencies in the company's working capital management and overall operational performance.
Peer comparison
Dec 31, 2024