Magnolia Oil & Gas Corp (MGY)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | — | — | — | — | — |
| Receivables turnover | 6.47 | 9.92 | 7.20 | 6.64 | 8.91 |
| Payables turnover | 0.42 | 0.37 | 0.70 | 1.42 | 1.13 |
| Working capital turnover | 4.44 | 3.32 | 3.60 | 3.55 | 7.98 |
Activity ratios provide insights into how efficiently a company is managing its assets and liabilities to generate sales. Let's analyze Magnolia Oil & Gas Corp's activity ratios for the years presented:
1. Receivables Turnover:
- The receivables turnover ratio indicates how many times, on average, the company collects its accounts receivable during a period.
- Magnolia's receivables turnover has fluctuated over the years, ranging from a high of 9.92 in 2022 to a low of 6.47 in 2023.
- Generally, a higher receivables turnover ratio indicates quicker collection of cash from customers, reflecting better credit management.
2. Payables Turnover:
- The payables turnover ratio measures how quickly a company pays its suppliers.
- Magnolia's payables turnover has been relatively low, with a decreasing trend from 2019 to 2022 and a slight increase in 2023.
- A lower payables turnover ratio could imply that the company is taking longer to settle its payables, which may lead to strained relationships with suppliers.
3. Working Capital Turnover:
- The working capital turnover ratio shows how effectively a company is using its working capital to generate revenue.
- Magnolia's working capital turnover has varied over the years, with a peak of 7.98 in 2019 and a dip in subsequent years.
- A higher working capital turnover ratio suggests that the company is efficiently deploying its resources to drive sales growth.
Overall, the analysis of Magnolia Oil & Gas Corp's activity ratios suggests that the company has experienced fluctuations in its efficiency in managing its receivables, payables, and working capital over the years. Continuous monitoring and potential improvement in these ratios can enhance the company's operational performance and financial health.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 56.43 | 36.78 | 50.69 | 55.00 | 40.98 |
| Number of days of payables | days | 869.13 | 978.43 | 521.33 | 256.43 | 322.53 |
Analyzing Magnolia Oil & Gas Corp's activity ratios based on the given data, we can see a notable trend in the Days of Sales Outstanding (DSO) ratio over the past five years. DSO measures how long it takes for the company to collect its accounts receivable.
In 2023, the DSO is 56.43 days, showing an increase from 36.78 days in 2022. This indicates that Magnolia Oil & Gas Corp took longer to collect its receivables in 2023 compared to the previous year. However, the DSO in 2023 is lower than in 2021 and 2020, indicating some improvement in collecting receivables more efficiently than those years.
The Number of Days of Payables ratio, which measures how long it takes for the company to pay its suppliers, has shown fluctuation over the years. In 2023, the Number of Days of Payables is 869.13 days, significantly higher than in the previous years. This suggests that Magnolia Oil & Gas Corp took much longer to pay its suppliers in 2023 compared to the earlier years.
It is worth noting that the Days of Inventory on Hand (DOH) data is not provided for the years under review, so we cannot assess the efficiency of managing inventory levels over time.
Overall, based on the DSO and Number of Days of Payables ratios, Magnolia Oil & Gas Corp may need to focus on improving its accounts receivable collection practices and managing its payables effectively to enhance its working capital management in the future.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | 1.11 | 0.89 | 0.47 | 0.30 |
| Total asset turnover | 0.45 | 0.66 | 0.62 | 0.37 | 0.27 |
The long-term activity ratios of Magnolia Oil & Gas Corp provide insights into the company's efficiency in utilizing its fixed and total assets to generate revenue over the years.
1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how efficiently the company generates sales revenue from its investment in fixed assets.
- From 2019 to 2022, the fixed asset turnover ratio consistently increased from 0.30 to 1.11, indicating that Magnolia Oil & Gas Corp improved its ability to generate sales from its fixed assets.
- However, the lack of data for 2023 limits a comprehensive analysis of the trend for that year.
2. Total Asset Turnover:
- The total asset turnover ratio reflects the company's ability to generate sales relative to its total assets.
- Over the period from 2019 to 2022, the total asset turnover ratio increased steadily from 0.27 to 0.66, demonstrating improved efficiency in asset utilization.
- The 2023 data shows a slight decrease in the total asset turnover ratio to 0.45, suggesting potential changes in asset utilization efficiency, which would require further investigation for a conclusive analysis.
Overall, Magnolia Oil & Gas Corp has shown improvements in both fixed asset turnover and total asset turnover ratios over the analyzed years, indicating enhanced efficiency in utilizing its assets to generate sales revenue. Further in-depth analysis and comparison with industry benchmarks could provide additional insights into the company's long-term activity performance.