Gentherm Inc (THRM)

Current ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Total current assets	US$ in thousands	684,015	687,564	683,867	565,845	643,606
Total current liabilities	US$ in thousands	340,293	324,953	285,625	213,089	205,984
Current ratio		2.01	2.12	2.39	2.66	3.12

December 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $684,015K ÷ $340,293K
= 2.01

Based on the provided data, Gentherm Inc's current ratio has shown a declining trend over the past five years. The current ratio, which measures the company's ability to meet its short-term obligations with its current assets, was 3.12 as of December 31, 2020, indicating a strong liquidity position. However, this ratio decreased to 2.66 by December 31, 2021, and continued to decline to 2.39 by December 31, 2022, 2.12 by December 31, 2023, and 2.01 by December 31, 2024.

While a current ratio above 1 generally indicates that a company has more current assets than current liabilities, a decreasing trend may raise concerns about the company's ability to pay off its short-term debts as they come due. It suggests that Gentherm Inc may have fewer current assets relative to current liabilities over time, which could potentially lead to liquidity challenges if the trend continues.

Further analysis and monitoring of Gentherm Inc's liquidity management and working capital practices may be necessary to address the declining current ratio and ensure the company's financial health and stability in the future.