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.