Magnolia Oil & Gas Corp (MGY)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | — | — | — | — | — |
| Receivables turnover | 8.90 | 6.47 | 9.92 | 7.20 | 6.64 |
| Payables turnover | 0.53 | 0.42 | 0.37 | 0.70 | 1.42 |
| Working capital turnover | 10.91 | 4.44 | 3.32 | 3.60 | 3.55 |
Inventory Turnover Ratio:
- The Inventory turnover ratio for Magnolia Oil & Gas Corp was not available for the years 2020 to 2024.
Receivables Turnover Ratio:
- The Receivables turnover ratio indicates how many times a company collects its accounts receivable during a period. The trend for Magnolia Oil & Gas Corp shows an improving collection efficiency over the years, with a significant increase from 2020 to 2022, followed by some fluctuations in the subsequent years.
Payables Turnover Ratio:
- The Payables turnover ratio reflects how efficiently a company manages its accounts payable by paying its suppliers. Magnolia Oil & Gas Corp's ratio indicates that the company's payment cycle has been fluctuating, with a substantial decrease in 2021 and slight improvements in the following years.
Working Capital Turnover Ratio:
- The Working Capital turnover ratio measures how effectively a company is utilizing its working capital to generate sales revenue. Magnolia Oil & Gas Corp has shown a promising increase in this ratio over the years, with a notable improvement from 2023 to 2024, indicating more efficient utilization of working capital to support revenue growth.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 41.02 | 56.43 | 36.78 | 50.69 | 55.00 |
| Number of days of payables | days | 692.33 | 869.13 | 978.43 | 521.33 | 256.43 |
Based on the provided data for Magnolia Oil & Gas Corp, we can analyze the activity ratios as follows:
1. Days of Inventory on Hand (DOH):
- The data shows that specific values for Days of Inventory on Hand are not available for the years 2020 to 2024. The absence of this metric makes it challenging to evaluate the efficiency of managing inventory levels and turnover during these periods. Ideally, a lower DOH value indicates a faster turnover of inventory, which is beneficial for liquidity and working capital management.
2. Days of Sales Outstanding (DSO):
- The Days of Sales Outstanding measure how long it takes for the company to collect payments from its customers. The trend observed is as follows:
- December 31, 2020: 55.00 days
- December 31, 2021: 50.69 days
- December 31, 2022: 36.78 days
- December 31, 2023: 56.43 days
- December 31, 2024: 41.02 days
- A decreasing trend in DSO from 2020 to 2022 and then an increase by 2023, followed by a decrease in 2024, indicates improvements in the efficiency of sales collection processes. Lower DSO values imply faster cash conversion and better liquidity management.
3. Number of Days of Payables:
- The Number of Days of Payables ratio signifies the average number of days it takes for the company to pay its suppliers. The data displays the following values:
- December 31, 2020: 256.43 days
- December 31, 2021: 521.33 days
- December 31, 2022: 978.43 days
- December 31, 2023: 869.13 days
- December 31, 2024: 692.33 days
- The significant increase in the Number of Days of Payables from 2020 to 2022 followed by a slight decrease in 2023 and 2024 could indicate potential delays in payment to suppliers. A longer period of payables may sometimes suggest advantageous terms with suppliers, but it could also hint at financial stress or liquidity challenges if payments are being delayed intentionally.
In conclusion, the analysis of Magnolia Oil & Gas Corp's activity ratios reveals fluctuations in Days of Sales Outstanding and Number of Days of Payables over the years, reflecting changes in the efficiency of cash conversion and payment management processes. The absence of inventory data limits a comprehensive assessment of the company's overall working capital efficiency.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 1.11 | 0.89 | 0.47 |
| Total asset turnover | 0.47 | 0.45 | 0.66 | 0.62 | 0.37 |
The fixed asset turnover ratio measures the efficiency of Magnolia Oil & Gas Corp in utilizing its fixed assets to generate revenue. The trend indicates an improvement over the years, with the ratio increasing from 0.47 in 2020 to 1.11 in 2022. This suggests that Magnolia is generating more revenue per dollar invested in fixed assets.
On the other hand, the total asset turnover ratio reflects the company's ability to generate sales from its total assets. The ratio shows some fluctuation, starting at 0.37 in 2020, peaking at 0.66 in 2022, and then declining to 0.47 in 2024. This may indicate varying levels of efficiency in utilizing all assets to generate sales.
Overall, the increasing trend in fixed asset turnover ratio indicates improved efficiency in utilizing fixed assets, while the fluctuation in total asset turnover suggests some inconsistency in generating sales from total assets over the years. Further analysis and comparison with industry benchmarks could provide deeper insights into Magnolia's long-term activity ratios performance.