Diamondback Energy Inc (FANG)
Liquidity 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.77 | 0.89 | 0.43 | 0.62 | 0.81 | 0.61 | 0.73 | 0.72 | 1.01 | 0.73 | 0.58 | 0.46 | 0.49 | 0.45 | 0.62 | 0.95 | 0.69 | 0.72 | 0.82 | 0.62 |
| Quick ratio | 0.68 | 0.85 | 0.39 | 0.52 | 0.75 | 0.48 | 0.66 | 0.66 | 0.92 | 0.89 | 0.79 | 0.68 | 0.87 | 0.83 | 0.46 | 0.42 | 0.58 | 0.54 | 0.71 | 0.55 |
| Cash ratio | 0.28 | 0.39 | 0.01 | 0.02 | 0.16 | 0.02 | 0.03 | 0.08 | 0.45 | 0.48 | 0.44 | 0.35 | 0.52 | 0.51 | 0.05 | 0.11 | 0.10 | 0.08 | 0.28 | 0.13 |
Diamondback Energy Inc's liquidity ratios demonstrate fluctuating trends over the past eight quarters. The current ratio, which measures the company's ability to cover short-term obligations with current assets, has ranged from as low as 0.43 to as high as 0.89. These fluctuations indicate varying levels of liquidity risk during this period.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also shows volatility between 0.40 and 0.86, reflecting potential challenges in meeting immediate financial commitments without relying on inventory.
Furthermore, the cash ratio, which indicates the portion of current liabilities that can be covered by cash and cash equivalents, ranges from 0.02 to 0.40. This suggests that Diamondback Energy Inc may have faced instances where its cash position was insufficient to cover short-term obligations.
Overall, the company's liquidity ratios indicate a mixed picture of its ability to meet short-term financial obligations consistently. It is essential for stakeholders to monitor these ratios closely to assess the company's liquidity position and potential liquidity risks.
See also:
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -420.65 | -638.34 | -398.29 | -364.90 | -106.95 | -151.59 | 48.19 | 78.39 | 99.30 | 63.57 | 50.63 | 73.12 | 54.45 | 41.53 | 34.67 | -3.22 | -0.90 | -669.61 | -593.59 | -585.42 |
The cash conversion cycle measures the efficiency of Diamondback Energy Inc in managing its working capital, specifically how quickly the company can convert its resources into cash flow. Looking at the data provided, we can observe fluctuation in the cash conversion cycle over the past eight quarters.
In Q1 2022, the cash conversion cycle was at its peak at 49.10 days, indicating that Diamondback Energy took almost 50 days to convert its resources into cash. However, by Q3 2022, the company had significantly improved its efficiency, with the cycle reducing to 29.78 days, reflecting a more efficient working capital management process.
From Q4 2022 to Q3 2023, the cash conversion cycle generally remained below the 40-day mark, indicating that Diamondback Energy was maintaining relatively efficient operations in terms of working capital management. Q3 2023 saw a slight increase to 44.26 days, suggesting a temporary slowdown in the conversion of resources into cash compared to the previous quarter.
Overall, while there have been fluctuations in the cash conversion cycle for Diamondback Energy Inc, the company has managed to keep the cycle within a reasonable range, indicating some level of consistency and efficiency in turning its resources into cash flow over the past eight quarters.