Magnolia Oil & Gas Corp (MGY)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	1,226,980	1,694,490	1,078,350	541,303	942,156
Total current assets	US$ in thousands	591,273	850,747	517,918	281,526	293,218
Total current liabilities	US$ in thousands	314,887	340,273	218,545	128,949	175,208
Working capital turnover		4.44	3.32	3.60	3.55	7.98

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,226,980K ÷ ($591,273K – $314,887K)
= 4.44

The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales revenue. A higher ratio indicates better efficiency in managing working capital.

In the case of Magnolia Oil & Gas Corp, the working capital turnover ratio has fluctuated over the past five years. In 2023, the ratio stood at 4.44, showing an improvement from the previous year's 3.32. This indicates that in 2023, Magnolia Oil & Gas Corp generated $4.44 in revenue for every dollar of working capital invested.

Comparing the 2023 ratio to earlier years, we see that it is higher than the ratios in 2021 and 2020 but lower than the exceptionally high ratio of 7.98 in 2019. This suggests that in 2023, Magnolia Oil & Gas Corp was more efficient in using its working capital compared to the years 2021 and 2020, but not as efficient as in 2019.

Overall, the increasing trend in the working capital turnover ratio from 2020 to 2023 indicates a general improvement in the company's ability to generate revenue from its working capital. This could be a signal of improved operational efficiency and effective working capital management by Magnolia Oil & Gas Corp during this period.