Magnolia Oil & Gas Corp (MGY)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	401,121	675,441	366,982	192,561	182,633
Short-term investments	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	314,887	340,273	218,545	128,949	175,208
Cash ratio		1.27	1.98	1.68	1.49	1.04

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($401,121K + $—K) ÷ $314,887K
= 1.27

The cash ratio of Magnolia Oil & Gas Corp has been fluctuating over the past five years. The ratio measures the company's ability to cover its short-term liabilities with cash and cash equivalents on hand.

In 2023, the cash ratio decreased to 1.27 from 1.98 in 2022, indicating a lower ability to cover short-term obligations with cash alone. This could suggest that the company may have utilized more of its cash reserves for other purposes or had a higher level of short-term liabilities relative to cash on hand.

Looking back at previous years, the cash ratio was relatively stable in 2021 and 2020 at 1.68 and 1.49, respectively, which may indicate a consistent ability to meet short-term obligations with available cash. In 2019, the cash ratio was the lowest at 1.04, indicating a potential liquidity challenge.

Overall, while the recent decrease in the cash ratio in 2023 may raise some concerns about short-term liquidity, it is important to consider the trend over multiple years and assess the company's overall financial health and liquidity position in conjunction with other financial ratios and factors.