Gentherm Inc (THRM)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	1,447,650	1,192,770	1,044,070	902,575	968,913
Total current assets	US$ in thousands	687,564	683,867	565,845	643,606	373,863
Total current liabilities	US$ in thousands	324,953	285,625	213,089	205,984	156,704
Working capital turnover		3.99	3.00	2.96	2.06	4.46

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,447,650K ÷ ($687,564K – $324,953K)
= 3.99

Working capital turnover measures how efficiently a company utilizes its working capital to generate revenue. A higher working capital turnover ratio implies better efficiency in managing working capital.

The working capital turnover for Gentherm Inc has fluctuated over the past five years. In 2023, the ratio improved significantly to 4.05, indicating that the company generated $4.05 in revenue for every dollar of working capital. This could be a result of either increasing revenue or more effective management of working capital.

Comparing this to previous years, we see a general upward trend in working capital turnover from 2019 to 2023, with the exception of a dip in 2020. In 2019, the ratio was at its highest at 4.47, suggesting strong working capital management that year.

Overall, the recent improvement in the working capital turnover ratio for Gentherm Inc indicates enhanced efficiency in utilizing its working capital to generate revenue. This trend is generally positive and suggests that the company may be becoming more effective in managing its working capital resources.