Gentex Corporation (GNTX)

Liquidity 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
Current ratio 4.11 3.69 3.56 3.52 3.67 3.85 3.71 3.38 3.79 3.73 3.47 3.99 4.81 4.55 4.71 4.53 5.51 4.12 3.95 3.45
Quick ratio 2.18 1.97 1.91 2.00 2.07 2.29 2.20 1.93 2.05 2.00 1.94 2.37 2.85 2.69 3.06 3.40 4.14 3.05 2.69 2.44
Cash ratio 1.01 0.71 0.90 0.87 0.89 1.01 0.93 0.81 0.95 0.90 0.98 1.20 1.47 1.44 1.87 2.16 2.53 1.92 1.90 1.55

Gentex Corporation's liquidity ratios indicate the company's ability to meet its short-term obligations with its current assets.

- The current ratio has been fluctuating over the past few years, ranging from a low of 3.38 to a high of 5.51. Although the ratio peaked in December 2020, it has generally remained above 3, indicating that the company has more than enough current assets to cover its current liabilities.

- The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also displayed variability, with values ranging from 1.91 to 4.14. This ratio ensures the company's ability to meet its short-term liabilities without relying on selling inventory.

- The cash ratio, representing the most conservative measure of liquidity, considers only cash and cash equivalents in relation to current liabilities. Gentex Corporation's cash ratio has fluctuated between 0.71 and 2.53, indicating that the company has enough cash to cover its short-term obligations, although at times the ratio has been relatively low.

Overall, Gentex Corporation has generally maintained healthy liquidity ratios, demonstrating its ability to meet short-term obligations. However, fluctuations in these ratios suggest the need for careful monitoring of the company's liquidity position to ensure continued financial stability.

Additional liquidity measure

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
Cash conversion cycle days 104.52 112.37 104.04 106.37 98.78 108.66 111.47 117.59 116.75 123.44 115.83 125.37 117.56 103.31 90.63 97.38 104.84 106.16 100.87 89.32

The cash conversion cycle for Gentex Corporation has shown fluctuations over the period from March 31, 2020, to December 31, 2024. The cycle measures the time it takes for the company to convert its investments in inventory back into cash from sales.

Initially, the cash conversion cycle was around 89.32 days on March 31, 2020, indicating a relatively efficient process. However, it increased gradually to 125.37 days on March 31, 2022, demonstrating a lengthening cycle which may suggest potential challenges in managing working capital effectively.

Subsequently, there was a slight decrease in the cycle, reaching 98.78 days on December 31, 2023. This improvement may indicate better inventory management or quicker cash collection from customers. However, it is important to note that the cycle increased again to 112.37 days on December 31, 2024.

Overall, Gentex Corporation should focus on optimizing its cash conversion cycle to ensure efficient use of its resources and maximize cash flow. Strategies such as improving inventory turnover, streamlining accounts receivable processes, and negotiating favorable payment terms with suppliers could help in reducing the cycle and enhancing the company's financial performance.