Magnolia Oil & Gas Corp (MGY)

Payables turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	95,462	81,141	75,671	89,554	89,141
Payables	US$ in thousands	181,073	193,212	202,846	127,909	62,626
Payables turnover		0.53	0.42	0.37	0.70	1.42

December 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $95,462K ÷ $181,073K
= 0.53

The payables turnover ratio measures how effectively a company manages its accounts payable by comparing the cost of goods sold to the average accounts payable balance during a period. A higher payables turnover ratio typically indicates that a company is paying its suppliers more frequently or efficiently.

Analyzing the payables turnover ratio data of Magnolia Oil & Gas Corp over the years:
- As of December 31, 2020, the payables turnover ratio was 1.42, indicating that Magnolia Oil & Gas Corp turned over its payables approximately 1.42 times during the year.
- The payables turnover ratio decreased to 0.70 as of December 31, 2021, suggesting a decline in the frequency of paying suppliers compared to the previous year.
- By December 31, 2022, the payables turnover ratio dropped further to 0.37, signaling a significant slowdown in the payment of accounts payable.
- The ratio improved slightly to 0.42 by December 31, 2023, but remained relatively low, indicating continued challenges in managing payables effectively.
- Finally, as of December 31, 2024, the payables turnover ratio increased to 0.53, showing some improvement but still below the initial ratio in 2020.

Overall, the trend in Magnolia Oil & Gas Corp's payables turnover ratio suggests a potential inefficiency in managing accounts payable, with a general decrease over the years. This may warrant further analysis to understand the reasons behind the declining turnover and explore opportunities for enhancing payables management efficiency.