Gentherm Inc (THRM)

Solvency 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
Debt-to-assets ratio 0.18 0.17 0.18 0.18 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
Debt-to-capital ratio 0.26 0.25 0.26 0.26 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
Debt-to-equity ratio 0.36 0.34 0.35 0.34 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
Financial leverage ratio 2.02 1.96 1.94 1.94 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

Gentherm Inc's solvency ratios provide insights into the company's ability to meet its long-term financial obligations.

1. Debt-to-Assets Ratio: The trend shows a steady decline in the debt-to-assets ratio from 0.26 in March 2020 to 0.18 in December 2024. This indicates that Gentherm's reliance on debt to finance its assets has reduced over time, which is a positive sign for the company's overall financial health.

2. Debt-to-Capital Ratio: The debt-to-capital ratio reflects a similar declining trend from 0.33 in March 2020 to 0.26 in December 2024. This ratio suggests the proportion of debt in Gentherm's capital structure has decreased, indicating a more balanced mix of debt and equity funding.

3. Debt-to-Equity Ratio: The debt-to-equity ratio also demonstrates a decreasing trend from 0.49 in March 2020 to 0.36 in December 2024. This reduction signifies that Gentherm has been effectively managing its debt levels relative to equity, enhancing its solvency position.

4. Financial Leverage Ratio: The financial leverage ratio shows fluctuations but generally increases from 1.90 in March 2020 to 2.02 in December 2024. Although an increasing leverage ratio can indicate higher financial risk, it can also suggest potential for higher returns on equity investment.

Overall, the declining trends in the debt-related ratios coupled with fluctuations in the financial leverage ratio indicate that Gentherm Inc has been actively managing its debt levels and working towards a more sustainable capital structure. However, continuous monitoring of these ratios is essential to ensure the company maintains a healthy balance between debt and equity to support its long-term financial stability.

Coverage 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
Interest coverage 6.99 7.33 7.41 6.33 5.87 3.96 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

Based on the data provided, Gentherm Inc's interest coverage ratio has shown some fluctuations over the past few years. The interest coverage ratio indicates the company's ability to meet its interest payments on outstanding debt with its operating income.

From March 2020 to March 2021, Gentherm's interest coverage ratio improved steadily, reaching a peak of 41.70 by December 2021. This indicates that the company's operating income was significantly more than enough to cover its interest expenses during this period.

However, from March 2022 onwards, there was a noticeable decline in the interest coverage ratio. The ratio dropped to 4.94 by June 2023 and further decreased to 3.96 by September 2023, signaling potential financial stress as the company's ability to cover interest payments weakened.

Although there was a slight improvement in the interest coverage ratio by December 2023 and June 2024, the ratio remained below the levels seen in the earlier period, indicating that Gentherm Inc may still be facing challenges in meeting its interest obligations.

Overall, Gentherm Inc's interest coverage ratio has displayed both strength and weakness in recent years, with a significant decline in the ratio suggesting a potential need for the company to closely monitor its debt levels and operational efficiency to ensure sustainable financial health.