Gentex Corporation (GNTX)

Activity ratios

Short-term

Turnover ratios

	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
Inventory turnover	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	5.13	5.41	5.65	5.57
Receivables turnover	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	7.90	7.38	8.17	9.38
Payables turnover	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	13.10	13.55	14.13	13.93
Working capital turnover	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	2.39	2.32	2.46	3.27

Inventory turnover for Gentex Corp. has shown a consistent improvement over the quarters, indicating that the company is managing its inventory more efficiently. This suggests that Gentex is selling its inventory more quickly, which could lead to lower carrying costs and potential reductions in obsolete inventory.

Receivables turnover has been relatively stable, indicating that Gentex has been successful in collecting payments from its customers in a timely manner. A high receivables turnover ratio signifies effective credit policies and efficient collection procedures.

The payables turnover ratio has fluctuated but generally remains at a healthy level, indicating that Gentex is efficiently managing its payables. A higher payables turnover ratio suggests that the company is paying its suppliers in a timely manner, potentially benefiting from discounts and maintaining good relationships with vendors.

Working capital turnover has shown a slight increase over the quarters, suggesting that Gentex is efficiently utilizing its working capital to generate sales. A higher working capital turnover ratio indicates that the company is effectively managing its current assets and liabilities to support its operations.

Overall, the activity ratios indicate that Gentex Corp. is effectively managing its inventory, receivables, payables, and working capital to support its operations and generate sales efficiently.

Average number of days

		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
Days of inventory on hand (DOH)	days	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	71.09	67.44	64.60	65.53
Days of sales outstanding (DSO)	days	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	46.23	49.45	44.65	38.90
Number of days of payables	days	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	27.86	26.93	25.84	26.21

To analyze Gentex Corp.'s activity ratios, we will focus on three key metrics: Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.

1. Days of Inventory on Hand (DOH):
- The trend in DOH indicates how efficiently Gentex manages its inventory. A decreasing trend in DOH is generally positive as it shows the company is selling inventory more quickly.
- In Q4 2023, Gentex's DOH stood at 95.60 days, a decrease from the previous quarter. This implies a more efficient inventory management compared to the 106.47 days in Q1 2023.
- However, it is worth noting that the DOH has fluctuated over the quarters, with a significant decrease from Q1 2023 to Q2 2023, followed by a subsequent increase in Q3 2023. Overall, the company should aim to maintain a consistent and optimal level of inventory to support sales without excess stock.

2. Days of Sales Outstanding (DSO):
- DSO reflects how quickly Gentex is collecting payments from customers. A lower DSO indicates faster cash collection and better liquidity.
- In Q4 2023, Gentex's DSO stood at 51.09 days, which is lower than the prior quarter. This suggests an improvement in the company's collection processes and efficiency in converting sales into cash.
- The fluctuation in DSO over the quarters is evident, but the general trend seems to be decreasing, which is a positive indicator for the company's cash flow management.

3. Number of Days of Payables:
- The number of days of payables metric shows how long Gentex takes to pay its suppliers. A higher number suggests the company is taking longer to settle its payables, potentially indicating better cash flow management.
- Gentex's number of days of payables decreased in Q4 2023 to 43.80 days, compared to the prior quarter. This could indicate the company is paying its suppliers more quickly, which may impact its liquidity position.
- The fluctuation in this ratio over the quarters is notable, with a significant increase in Q2 2022 followed by a gradual decrease. Gentex needs to strike a balance in managing payables to ensure it maintains good relationships with suppliers while optimizing cash flow.

In conclusion, Gentex Corp. shows varying trends in its activity ratios, with improvements in inventory management and cash collection processes. However, the fluctuating nature of these ratios suggests the need for the company to focus on maintaining consistency in its working capital management for sustainable performance.

Long-term

	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
Fixed asset turnover	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	3.73	3.80	3.69	4.65
Total asset turnover	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	0.86	0.86	0.86	1.09

Long-term activity ratios provide insights into how effectively a company manages its assets to generate sales.

The fixed asset turnover for Gentex Corp. has been quite consistent over the past eight quarters, ranging from 3.48 to 3.66 times. This ratio indicates that the company generates $3.48 to $3.66 in sales for every dollar invested in fixed assets. A higher fixed asset turnover is generally preferred as it suggests that the company efficiently utilizes its fixed assets to generate revenue.

On the other hand, the total asset turnover ratio has also shown stability over the same period, with values fluctuating between 0.77 and 0.88. This ratio reflects the company's ability to generate sales from all its assets. A total asset turnover of 0.88 in Q4 2023 indicates that Gentex Corp. generated $0.88 in sales for every dollar of total assets held during that quarter.

Overall, both the fixed asset turnover and total asset turnover ratios for Gentex Corp. are within a close range, suggesting that the company effectively utilizes its assets, both fixed and total, to generate revenue. However, investors and analysts may want to monitor these ratios over time to ensure that the company continues to optimize its asset utilization efficiently.