Diamondback Energy Inc (FANG)

Quick ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash	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
Receivables	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	4,811,000	2,108,000	1,716,000	1,438,000	1,236,000
Quick ratio		0.03	0.28	0.16	0.46	0.52

December 31, 2024 calculation

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

The quick ratio of Diamondback Energy Inc has shown a declining trend over the past five years. As of December 31, 2020, the quick ratio was 0.52, indicating that the company had $0.52 in liquid assets available to cover each $1 of current liabilities. However, this ratio decreased to 0.46 by December 31, 2021, suggesting a slight deterioration in the company's ability to meet its short-term obligations using its most liquid assets.

The quick ratio further dropped to 0.16 by December 31, 2022, which may raise concerns about the company's liquidity position as it now had only $0.16 in quick assets for each $1 of current liabilities. Despite this significant decline, there was a slight improvement by December 31, 2023, with the quick ratio increasing to 0.28. This improvement indicates a better liquidity position compared to the previous year, although the ratio remained relatively low.

By December 31, 2024, the quick ratio fell sharply to 0.03, reflecting a significant challenge for Diamondback Energy Inc in meeting its short-term obligations with its liquid assets. The decreasing trend in the quick ratio over the five-year period suggests a potential liquidity risk for the company, as its ability to cover immediate liabilities with quick assets has weakened significantly. Management may need to closely monitor and address this trend to ensure the company's financial stability and ability to meet its short-term obligations.