Gentherm Inc (THRM)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	63.18	56.44	71.44	65.06	56.06
Days of sales outstanding (DSO)	days	64.88	63.94	77.30	68.53	93.36
Number of days of payables	days	63.03	59.16	59.65	50.07	53.15
Cash conversion cycle	days	65.03	61.21	89.10	83.52	96.28

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 63.18 + 64.88 – 63.03
= 65.03

The cash conversion cycle of Gentherm Inc has shown fluctuations over the years based on the provided data. In December 2020, the cycle was at 96.28 days, indicating that it took the company approximately 96 days to convert its investments in inventory and other resources into cash flows from sales.

By December 2021, the cash conversion cycle improved to 83.52 days, suggesting that Gentherm was managing its working capital more efficiently, reducing the time it took to convert resources into cash.

In December 2022, the cycle slightly increased to 89.10 days, signaling a potential slowdown in converting investments into cash compared to the previous year.

However, there was a significant improvement in December 2023, with the cycle decreasing to 61.21 days. This sharp decline indicates a considerable improvement in the company's working capital management and efficiency in converting investments into cash flows.

In December 2024, the cycle remained relatively low at 65.03 days, showcasing Gentherm's continued efficiency in managing its cash conversion cycle.

Overall, the trend in Gentherm's cash conversion cycle demonstrates fluctuations in working capital efficiency over the years, with a notable improvement in 2023 compared to previous years. Efforts to optimize working capital management have positively impacted the company's ability to convert investments into cash flows efficiently.