Gentex Corporation (GNTX)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	233,319	226,435	214,755	262,312	423,371
Short-term investments	US$ in thousands	22,305	14,356	23,007	5,424	27,164
Total current liabilities	US$ in thousands	252,693	271,609	250,553	181,656	177,737
Cash ratio		1.01	0.89	0.95	1.47	2.53

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($233,319K + $22,305K) ÷ $252,693K
= 1.01

The cash ratio of Gentex Corporation has shown a decreasing trend over the past few years, starting at 2.53 on December 31, 2020, and declining to 1.47 on December 31, 2021, 0.95 on December 31, 2022, 0.89 on December 31, 2023, and then slightly increasing to 1.01 on December 31, 2024.

A cash ratio below 1 indicates that the company may have difficulty meeting its short-term obligations with its cash and cash equivalents alone. The decreasing trend in Gentex's cash ratio may imply a need to closely manage its liquidity position, as it may have less cash on hand relative to its current liabilities.

It is essential for Gentex Corporation to monitor its cash management practices and ensure that it maintains adequate liquidity to cover its short-term obligations without relying heavily on external financing or asset liquidation.