Gentherm Inc (THRM)

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 2.01 2.02 2.11 2.10 2.12 2.24 2.31 2.32 2.39 2.20 2.48 2.47 2.66 2.66 2.70 2.53 3.12 3.02 3.53 3.19
Quick ratio 1.15 1.15 1.20 1.25 1.25 1.35 1.40 1.41 1.43 1.25 1.58 1.65 1.81 1.84 1.91 1.83 2.42 2.30 2.51 2.28
Cash ratio 0.39 0.41 0.38 0.38 0.47 0.51 0.56 0.55 0.55 0.44 0.66 0.73 0.89 0.91 0.90 0.77 1.30 1.19 1.54 1.30

Gentherm Inc's current ratio has shown a gradual decline from 3.53 as of June 30, 2020, to 2.01 as of December 31, 2024. Despite this decrease, the company has maintained a current ratio above 2.0, indicating that it has a healthy level of current assets to cover its current liabilities.

The quick ratio, which is a more stringent measure of liquidity, has also seen a decreasing trend over the years, falling from 2.51 on June 30, 2020, to 1.15 on December 31, 2024. This implies that Gentherm Inc may face challenges in meeting its short-term obligations using only its most liquid assets.

Furthermore, the cash ratio has followed a similar declining pattern, dropping from 1.54 on June 30, 2020, to 0.39 on December 31, 2024. This suggests that the company's ability to cover its current liabilities solely with cash and cash equivalents has weakened over time.

In summary, while Gentherm Inc maintains current and quick ratios above the conventional benchmark of 1.0, the decreasing trend in these ratios indicates a potential liquidity concern, especially evidenced by the decline in the cash ratio. Management may need to closely monitor and improve the company's liquidity position to ensure it can meet its short-term obligations effectively.

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 65.11 62.82 64.64 71.15 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

The cash conversion cycle for Gentherm Inc fluctuated over the period from March 31, 2020, to December 31, 2024. The cash conversion cycle is a measure of how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Initially, the company's cash conversion cycle was around 74.13 days as of March 31, 2020, and it increased gradually to 96.23 days by December 31, 2020. This indicates that the company was taking longer to convert its investments into cash during this period.

From March 31, 2021, to September 30, 2021, there was some improvement in the cash conversion cycle, with the number decreasing to around 78.99 days. However, by December 31, 2021, the cycle increased slightly to 83.49 days.

Subsequently, from March 31, 2022, to September 30, 2022, the cash conversion cycle remained relatively stable, fluctuating between 87.58 days and 94.99 days. There was a decrease in the cycle to 61.17 days by December 31, 2023, indicating improved efficiency in converting inventory and other assets into cash.

As of December 31, 2024, the cash conversion cycle was at 65.11 days, showing consistency with the previous quarter's improvement. Overall, the trend in the cash conversion cycle over the period reflects fluctuations in the company's working capital management and efficiency in converting resources into cash.