Gentherm Inc (THRM)

Quick ratio

		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	US$ in thousands	134,134	150,581	123,466	125,107	149,673	154,354	168,671	166,630	153,891	139,163	157,258	177,917	190,606	195,086	186,863	170,955	268,345	226,533	209,170	222,939
Short-term investments	US$ in thousands	—	—	2,058	2,366	2,062	3,506	3,445	2,073	2,772	2,498	—	—	—	—	—	—	—	—	—	—
Receivables	US$ in thousands	258,112	270,913	264,759	289,157	253,579	263,765	258,157	262,702	252,621	259,798	219,962	223,309	196,020	200,992	209,613	235,756	230,872	211,443	131,708	168,319
Total current liabilities	US$ in thousands	340,293	365,450	326,118	333,095	324,953	312,303	307,622	306,872	285,625	320,224	239,218	243,700	213,089	215,353	207,142	222,750	205,984	190,601	136,010	171,300
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

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($134,134K + $—K + $258,112K) ÷ $340,293K
= 1.15

The quick ratio of Gentherm Inc has shown a gradual decline over the past few years, indicating a potential deterioration in the company's short-term liquidity position. Starting at a healthy level of 2.28 in March 2020, the quick ratio increased slightly to 2.51 by June 2020, suggesting improved ability to cover its short-term liabilities with its most liquid assets.

However, the quick ratio began to trend downwards from September 2020 to December 2021, ranging from 2.30 to 1.81, indicating a reduction in the company's ability to meet its short-term obligations without selling its inventory. This decline continued into 2022 and 2023, with the quick ratio falling below 2 to levels between 1.25 and 1.40, reflecting increasing strain on the company's liquidity position.

By the end of 2024, the quick ratio further decreased to 1.15, indicating that Gentherm Inc may face challenges in meeting its short-term financial obligations with its readily available assets alone. This declining trend in the quick ratio suggests a potential need for the company to carefully manage its liquidity and working capital in order to maintain financial stability in the future.