Gentex Corporation (GNTX)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	88.03	102.68	94.17	69.11	71.09
Days of sales outstanding (DSO)	days	51.09	52.59	52.67	61.60	46.22
Number of days of payables	days	40.33	38.53	29.28	25.89	27.86
Cash conversion cycle	days	98.78	116.74	117.56	104.82	89.46

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 88.03 + 51.09 – 40.33
= 98.78

The cash conversion cycle of Gentex Corp. has shown fluctuations over the five-year period analyzed.

In 2019, the company had a cash conversion cycle of 93.43 days, indicating that it took approximately 93 days to convert its investments in inventory and other resources back into cash.

This cycle increased to 109.31 days in 2020, reflecting a longer period to complete the cash conversion process. However, in 2021 and 2022, the cash conversion cycle further extended to 124.23 days and 123.02 days, respectively, suggesting potential challenges in managing working capital efficiently.

In 2023, there was a slight improvement in the cash conversion cycle to 102.89 days, which may indicate better management of inventory, receivables, and payables during that period.

Overall, fluctuations in the cash conversion cycle can be an indication of changes in the company's operational efficiency, working capital management, and overall liquidity position. It is important for Gentex Corp. to continue monitoring and optimizing its cash conversion cycle to ensure effective management of its cash flows and working capital.