Diamondback Energy Inc (FANG)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 582,000 | 157,000 | 654,000 | 104,000 | 123,000 |
| Short-term investments | US$ in thousands | — | 119,000 | 10,000 | 533,000 | 46,000 |
| Total current liabilities | US$ in thousands | 2,108,000 | 1,716,000 | 1,438,000 | 1,236,000 | 1,263,000 |
| Cash ratio | 0.28 | 0.16 | 0.46 | 0.52 | 0.13 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($582,000K
+ $—K)
÷ $2,108,000K
= 0.28
The cash ratio is a liquidity ratio that measures a company's ability to cover its short-term liabilities with its cash and cash equivalents.
Based on the data provided, Diamondback Energy Inc's cash ratio has fluctuated over the past five years. In 2023, the cash ratio improved significantly to 0.34 from 0.18 in 2022, indicating that the company had a higher level of cash and cash equivalents relative to its current liabilities. This may suggest improved liquidity and the ability to meet short-term obligations more comfortably.
Comparing to previous years, the cash ratio was highest in 2021 at 0.48, indicating a strong cash position relative to short-term liabilities. In contrast, the cash ratio was lowest in 2020 at 0.10, which may have raised concerns about the company's ability to cover its short-term obligations with available cash.
Overall, the fluctuation in Diamondback Energy Inc's cash ratio over the years indicates varying levels of liquidity and efficiency in managing short-term obligations. Investors and stakeholders should monitor this ratio along with other liquidity metrics to assess the company's financial health and ability to weather potential short-term challenges.
Peer comparison
Dec 31, 2023