Magnolia Oil & Gas Corp (MGY)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	260,049	401,121	675,441	366,982	192,561
Short-term investments	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	290,261	314,887	340,273	218,545	128,949
Cash ratio		0.90	1.27	1.98	1.68	1.49

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($260,049K + $—K) ÷ $290,261K
= 0.90

The cash ratio measures a company's ability to cover its short-term liabilities with its available cash and cash equivalents. For Magnolia Oil & Gas Corp, the trend in the cash ratio over the past five years is as follows:

- As of December 31, 2020, the cash ratio stood at 1.49, indicating that the company had $1.49 in cash and cash equivalents for every dollar of short-term liabilities.
- The ratio improved to 1.68 by December 31, 2021, showing an increase in liquidity.
- By December 31, 2022, the cash ratio further strengthened to 1.98, reflecting an even healthier position in terms of short-term liquidity.
- However, there was a slight decline in the cash ratio to 1.27 by December 31, 2023, suggesting a potential decrease in the ability to cover short-term liabilities with available cash.
- The ratio decreased significantly to 0.90 by December 31, 2024, indicating a notable reduction in liquidity and the company's ability to meet its short-term obligations solely with cash on hand.

Overall, while the cash ratio fluctuated over the five-year period, Magnolia Oil & Gas Corp generally maintained a solid position in terms of short-term liquidity until a significant decline in 2024. It would be important for the company to monitor its cash position and potentially implement strategies to improve its liquidity in the future.