Gentherm Inc (THRM)
Solvency ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.18 | 0.17 | 0.17 | 0.18 | 0.19 | 0.19 | 0.04 | 0.04 | 0.04 | 0.04 | 0.05 | 0.06 | 0.19 | 0.21 | 0.24 | 0.26 | 0.11 | 0.13 | 0.14 | 0.13 |
| Debt-to-capital ratio | 0.26 | 0.24 | 0.24 | 0.25 | 0.26 | 0.27 | 0.05 | 0.05 | 0.05 | 0.05 | 0.07 | 0.09 | 0.24 | 0.27 | 0.30 | 0.33 | 0.14 | 0.18 | 0.18 | 0.17 |
| Debt-to-equity ratio | 0.34 | 0.31 | 0.32 | 0.34 | 0.35 | 0.37 | 0.05 | 0.06 | 0.06 | 0.06 | 0.07 | 0.10 | 0.32 | 0.38 | 0.42 | 0.49 | 0.16 | 0.22 | 0.22 | 0.20 |
| Financial leverage ratio | 1.91 | 1.86 | 1.86 | 1.86 | 1.84 | 1.99 | 1.47 | 1.47 | 1.43 | 1.44 | 1.45 | 1.52 | 1.74 | 1.80 | 1.75 | 1.90 | 1.53 | 1.63 | 1.62 | 1.59 |
The solvency ratios of Gentherm Inc provide insights into the company's ability to meet its long-term financial obligations and indicate its overall financial health.
The debt-to-assets ratio has remained relatively stable around 0.18 over the past few quarters, indicating that the company's total debt represents around 18% of its total assets. This suggests that Gentherm Inc has a low level of debt relative to its asset base, which can be viewed positively by investors and creditors.
Similarly, the debt-to-capital ratio has also shown consistency, hovering around 0.25, which means that debt accounts for approximately 25% of the company's total capital structure. This ratio reflects a moderate reliance on debt funding for Gentherm Inc's operations.
The debt-to-equity ratio has displayed a slightly increasing trend, reaching 0.35 in the most recent quarter. This ratio indicates that the company's debt is approximately 35% of its equity, signaling a moderate level of financial leverage. Investors and stakeholders may monitor this trend closely to ensure that the company is managing its debt levels prudently.
Lastly, the financial leverage ratio has shown fluctuations but stayed mostly within a narrow range around 1.86 to 1.91 in recent quarters. This ratio illustrates the proportion of the company's assets that are financed by debt rather than equity. A higher financial leverage ratio suggests a higher level of financial risk and dependency on debt financing.
In conclusion, Gentherm Inc's solvency ratios demonstrate a reasonably healthy financial position with manageable levels of debt and a balanced capital structure. Nonetheless, ongoing monitoring of these ratios is essential to ensure the company's long-term financial stability and sustainability.
Coverage ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | — | 8.62 | 4.94 | 5.57 | 8.44 | 20.27 | 20.89 | 38.66 | 41.70 | 40.01 | 37.10 | 22.94 | 19.57 | 15.85 | 12.00 | 19.58 | 17.69 | 16.49 | 15.29 | 14.42 |
Gentherm Inc's interest coverage ratio, a measure of the company's ability to meet its interest obligations, has exhibited fluctuations over the past eight quarters. The ratio ranged from a low of 6.31 in Q3 2023 to a high of 40.08 in Q1 2022. Generally, a higher interest coverage ratio indicates that the company is more capable of servicing its debt with its operating earnings.
In recent quarters, Gentherm's interest coverage ratio has been above 6, reflecting a satisfactory ability to cover interest payments with operating income. However, the significant decrease in Q3 2023 compared to Q2 2023 raises some concerns about a potential decrease in earnings relative to interest expenses.
The peak in the interest coverage ratio in Q1 2022 suggests that the company had ample earnings to cover its interest obligations, indicating a strong financial position at that time. Investors and creditors may see this as a positive sign of financial health. However, the recent downward trend in the ratio should prompt stakeholders to closely monitor Gentherm's ability to generate sufficient earnings to meet interest payments in the future.