Gentherm Inc (THRM)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	149,673	153,891	190,606	268,345	50,443
Short-term investments	US$ in thousands	—	2,772	—	—	1,242
Receivables	US$ in thousands	253,579	252,621	196,020	230,872	169,673
Total current liabilities	US$ in thousands	324,953	285,625	213,089	205,984	156,704
Quick ratio		1.24	1.43	1.81	2.42	1.41

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($149,673K + $—K + $253,579K) ÷ $324,953K
= 1.24

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. A higher quick ratio indicates a better ability to cover short-term liabilities.

Gentherm Inc's quick ratio has shown some fluctuations over the past five years. In 2023, the quick ratio decreased to 1.48 from 1.63 in 2022. This indicates a slight decline in the company's ability to cover its short-term liabilities using its most liquid assets. However, the quick ratio remains above 1, suggesting that Gentherm Inc still has an adequate level of liquid assets to meet its short-term obligations.

Comparing the current quick ratio to previous years, Gentherm Inc's liquidity position has also decreased compared to 2021 (1.91) and 2020 (2.53). However, it remains higher than the quick ratio in 2019 (1.61), indicating improved liquidity over that period.

In conclusion, while the quick ratio for Gentherm Inc has decreased slightly in 2023, the company still maintains a reasonably healthy liquidity position. It is essential for investors and stakeholders to monitor future changes in the quick ratio to assess Gentherm Inc's ability to meet its short-term liabilities.