TRI Pointe Homes Inc (TPH)
Working capital turnover
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 3,715,206 | 3,978,306 | 4,211,590 | 4,391,951 | 4,348,534 | 4,035,744 | 3,997,134 | 3,997,504 | 3,982,226 | 3,833,046 | 3,632,320 | 3,384,366 | 3,260,450 | 3,340,890 | 3,256,821 | 3,185,429 | 3,083,011 | 3,074,441 | 3,101,117 | 3,173,706 |
| Total current assets | US$ in thousands | 868,953 | 849,039 | 981,567 | 966,298 | 889,664 | 228,137 | 270,124 | 412,703 | 681,528 | 587,405 | 556,483 | 584,665 | 621,295 | 493,585 | 474,545 | 624,129 | 329,011 | 130,262 | 171,516 | 148,782 |
| Total current liabilities | US$ in thousands | 43,991 | 48,977 | 46,713 | 43,439 | 42,027 | 71,569 | 77,732 | 73,547 | 55,156 | 62,912 | 61,096 | 55,741 | 43,602 | 39,288 | 30,411 | 28,534 | 20,876 | 316,528 | 284,036 | 163,032 |
| Working capital turnover | 4.50 | 4.97 | 4.51 | 4.76 | 5.13 | 25.78 | 20.78 | 11.79 | 6.36 | 7.31 | 7.33 | 6.40 | 5.64 | 7.35 | 7.33 | 5.35 | 10.01 | — | — | — |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $3,715,206K ÷ ($868,953K – $43,991K)
= 4.50
The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales revenue. A higher ratio indicates that the company is able to efficiently convert its working capital into sales.
In the case of Tri Pointe Homes Inc., the working capital turnover ratio fluctuated over the quarters provided. In Q4 2023, the ratio was 5.43, which implies that for every dollar of working capital, the company generated $5.43 of revenue. This represents a decrease from the previous quarter's ratio of 7.73 in Q3 2023. While the ratios in Q2 2023 and Q1 2023 were 5.98 and 6.13 respectively, Q4 2023 had the lowest ratio among these quarters.
Comparing the Q4 2023 ratio to Q4 2022's ratio of 6.43, there is also a decrease in efficiency in converting working capital into revenue. Notably, the Q4 2022 ratio was significantly lower than the Q1 2022 ratio of 66.00, indicating a substantial improvement in efficiency over this period.
Overall, the trend in working capital turnover for Tri Pointe Homes Inc. shows fluctuations in efficiency over the quarters analyzed, with Q4 2023 showing a decline in the ability to generate revenue relative to working capital compared to previous quarters. Further analysis and investigation would be needed to understand the drivers behind these fluctuations and evaluate the company's working capital management strategies.
Peer comparison
Dec 31, 2023