Gentherm Inc (THRM)

Cash conversion cycle

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	56.43	55.56	57.50	66.07	71.44	85.24	74.98	71.66	65.06	61.33	54.87	57.76	56.06	54.92	53.99	50.77	49.03	47.92	43.70	42.83
Days of sales outstanding (DSO)	days	63.90	67.42	67.86	74.82	77.27	85.67	78.37	79.47	68.50	67.70	69.80	89.24	93.32	91.26	57.70	65.25	63.44	62.24	61.62	61.25
Number of days of payables	days	59.16	57.72	57.42	62.88	59.65	75.93	58.75	63.55	50.07	49.29	45.69	58.10	53.15	51.95	31.41	41.89	34.36	36.02	32.60	34.87
Cash conversion cycle	days	61.17	65.26	67.94	78.02	89.06	94.99	94.60	87.58	83.49	79.74	78.99	88.90	96.23	94.22	80.28	74.13	78.11	74.14	72.72	69.21

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 56.43 + 63.90 – 59.16
= 61.17

The cash conversion cycle of Gentherm Inc has shown a positive trend of improvement over the past eight quarters. The cycle measures how long it takes for the company to convert its investments in inventory and other resources into cash flow from sales.

In Q4 2023, the cash conversion cycle decreased to 69.36 days from the previous quarter, indicating a more efficient management of working capital. This improvement continued from Q3 2023, which had a cycle of 73.47 days.

Comparing the latest data to the same period a year ago, there has been a significant enhancement in cash conversion efficiency. Q4 2023's cycle of 69.36 days is notably lower than the 98.90 days recorded in Q4 2022.

A decreasing cash conversion cycle suggests that Gentherm Inc is improving its ability to generate cash and streamline its operations. This trend is a positive indicator of the company's financial health and operational efficiency.