Gentex Corporation (GNTX)

Activity ratios

Short-term

Turnover ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Inventory turnover 3.87 3.78 3.62 3.86 4.15 4.10 4.05 3.75 3.55 3.28 3.27 3.41 3.88 4.32 4.89 5.14 5.28 4.98 4.52 5.09
Receivables turnover 7.83 6.63 7.59 6.85 7.14 6.28 6.05 6.01 6.94 6.31 6.38 6.10 6.93 7.63 8.18 6.19 5.92 5.97 9.40 7.89
Payables turnover 10.04 9.31 8.15 8.78 9.05 9.45 9.38 9.03 9.47 8.01 6.87 8.78 12.46 12.57 12.74 11.19 14.10 12.87 19.50 12.77
Working capital turnover 2.95 3.10 2.99 3.04 3.17 2.82 2.83 2.83 2.75 2.55 2.48 2.40 2.50 2.70 2.63 2.18 2.11 2.17 2.50 2.85

Activity ratios provide insight into how efficiently a company is managing its assets and resources to generate revenue. Let's analyze the activity ratios of Gentex Corporation based on the provided data:

1. Inventory Turnover Ratio: This ratio helps in evaluating how effectively Gentex is managing its inventory. The trend shows a declining trend from 5.09 in March 2020 to 3.87 in December 2024. A decreasing ratio could indicate slower inventory movement or potential issues with obsolete inventory.

2. Receivables Turnover Ratio: This ratio measures how quickly Gentex is collecting its accounts receivable. The trend fluctuates over the years, showing some inconsistency but generally maintaining a range between 5.92 to 7.83. A lower ratio may suggest credit or collection problems, while a higher ratio indicates efficient collection practices.

3. Payables Turnover Ratio: This ratio reflects how quickly Gentex is paying its suppliers. The ratio shows a decreasing trend, from 14.10 in December 2020 to 10.04 in December 2024. A lower turnover ratio can indicate lenient payment policies or potential liquidity issues.

4. Working Capital Turnover Ratio: This ratio measures how efficiently Gentex is utilizing its working capital to generate sales. The ratio fluctuates slightly but maintains a range between 2.11 to 3.17 over the years. A higher ratio indicates better utilization of working capital to generate revenue.

Overall, analyzing these activity ratios provides valuable insights into Gentex Corporation's operational efficiency and effectiveness in managing its assets and resources to drive revenue generation.

Average number of days

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Days of inventory on hand (DOH) days 94.27 96.49 100.76 94.62 88.02 89.12 90.10 97.31 102.69 111.15 111.77 107.09 94.17 84.54 74.69 70.99 69.11 73.35 80.78 71.67
Days of sales outstanding (DSO) days 46.60 55.09 48.06 53.31 51.09 58.16 60.29 60.70 52.59 57.84 57.20 59.88 52.67 47.82 44.60 59.01 61.62 61.18 38.81 46.24
Number of days of payables days 36.35 39.22 44.78 41.56 40.33 38.62 38.91 40.43 38.54 45.55 53.13 41.59 29.28 29.05 28.66 32.61 25.89 28.37 18.72 28.58

Based on the provided data, let's analyze Gentex Corporation's activity ratios:

1. Days of Inventory on Hand (DOH):
- The DOH ratio measures how many days, on average, a company holds its inventory before selling it.
- Gentex Corporation's DOH has shown fluctuations over the periods, ranging from a low of 69.11 days to a high of 111.77 days.
- The trend indicates an increase in the number of days inventory is held from March 31, 2020, to June 30, 2024, suggesting potential inefficiencies in inventory management.
- Monitoring and controlling inventory levels could help Gentex improve its cash flow and reduce carrying costs associated with excess inventory.

2. Days of Sales Outstanding (DSO):
- The DSO ratio reflects the average number of days it takes for a company to collect payment after a sale is made.
- Gentex Corporation's DSO varied between 38.81 days and 61.62 days over the analyzed periods.
- The trend shows fluctuations in collection efficiency, with improvements seen in some quarters and slight increases in others.
- Maintaining a lower DSO indicates that Gentex is able to collect payments faster, which is beneficial for cash flow management and working capital requirements.

3. Number of Days of Payables:
- This ratio represents the average number of days a company takes to pay its suppliers for purchases.
- Gentex Corporation's days of payables ranged from 18.72 days to 53.13 days during the analyzed periods.
- The trend indicates fluctuations in payment terms with both decreases and increases observed over time.
- Extending payment periods can provide short-term liquidity benefits, but it's essential to ensure good relationships with suppliers and avoid damaging credit terms.

Overall, analyzing these activity ratios provides insights into Gentex Corporation's efficiency in managing inventory, collecting receivables, and managing payables. By monitoring and improving these ratios, Gentex can enhance its operational performance and strengthen its financial position.

Long-term

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Fixed asset turnover 3.18 3.36 3.43 3.52 3.52 3.64 3.56 3.48 3.49 3.50 3.58 3.66 3.73 4.08 4.17 3.73 3.60 3.38 3.31 3.74
Total asset turnover 0.84 0.86 0.85 0.86 0.88 0.86 0.85 0.82 0.82 0.80 0.77 0.79 0.81 0.87 0.88 0.77 0.77 0.73 0.76 0.85

Gentex Corporation's Fixed Asset Turnover ratio has been relatively stable over the past five years, averaging around 3.50. This indicates that the company generates $3.50 in sales for every dollar invested in fixed assets. The slight fluctuations in the ratio over time suggest that the company is effectively utilizing its fixed assets to generate revenue.

In comparison, the Total Asset Turnover ratio for Gentex Corporation has shown a declining trend, decreasing from 0.85 in March 2020 to 0.84 in December 2024. This ratio measures how efficiently the company is using its total assets to generate sales. The decreasing trend may indicate that Gentex Corporation is becoming less efficient in utilizing its total assets to generate revenue over the period analyzed.

Overall, while Gentex Corporation's Fixed Asset Turnover remains relatively stable, indicating effective utilization of fixed assets, the decreasing trend in the Total Asset Turnover ratio suggests potential inefficiencies in utilizing the company's total assets to generate sales.