Diamondback Energy Inc (FANG)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	161,000	582,000	157,000	654,000	104,000
Short-term investments	US$ in thousands	—	—	119,000	10,000	533,000
Total current liabilities	US$ in thousands	4,811,000	2,108,000	1,716,000	1,438,000	1,236,000
Cash ratio		0.03	0.28	0.16	0.46	0.52

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($161,000K + $—K) ÷ $4,811,000K
= 0.03

The cash ratio of Diamondback Energy Inc has shown a declining trend from 0.52 as of December 31, 2020, to 0.03 as of December 31, 2024. The cash ratio measures the company's ability to cover its short-term liabilities with its cash and cash equivalents. A higher cash ratio is generally considered favorable as it indicates a company has a sufficient amount of cash to meet its short-term obligations.

The decreasing trend in Diamondback Energy's cash ratio over the years may raise concerns about its liquidity and ability to meet its short-term liabilities solely through its cash reserves. A low cash ratio could also indicate that the company may need to rely more on other sources of funding or manage its cash more effectively to ensure financial stability.

It is important for investors and stakeholders to closely monitor Diamondback Energy's cash ratio trends to assess its liquidity position and financial health accurately. Additionally, the company may need to implement strategies to improve its cash reserves and liquidity management to mitigate potential risks associated with its declining cash ratio.