Magnolia Oil & Gas Corp (MGY)

The solvency ratios of Magnolia Oil & Gas Corp indicate the company's ability to meet its long-term financial obligations. The trends over the past five years show a favorable position in terms of solvency.

The debt-to-assets ratio has been consistently low, indicating that only a small portion of the company's total assets is financed by debt. This suggests a strong financial position and a lower risk of insolvency.

The debt-to-capital ratio, which measures the proportion of capital provided by debt, has also shown a decreasing trend over the years. This indicates that the company has been relying less on debt financing to fund its operations relative to its total capital structure.

The debt-to-equity ratio has fluctuated but remained relatively low, indicating that the company is not overly reliant on debt to finance its operations compared to equity. This signifies a healthy balance between debt and equity in the capital structure.

The financial leverage ratio has decreased consistently over the years, showing a reduced reliance on debt to finance the company's assets. This ratio reflects the level of debt relative to equity and indicates a decreasing financial risk associated with higher leverage.

Overall, the solvency ratios of Magnolia Oil & Gas Corp demonstrate a strong financial position with a prudent level of debt usage, which is essential for long-term financial stability and sustainability.

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Coverage ratios

Interest coverage is a financial ratio that measures a company's ability to pay its interest expenses on its outstanding debt. A higher interest coverage ratio indicates a stronger ability to meet interest obligations.

Looking at the data provided for Magnolia Oil & Gas Corp's interest coverage over the past five years, we can see fluctuations in the ratio. As of December 31, 2023, the interest coverage ratio stood at 125.58, indicating that the company generated sufficient operating income to cover its interest expenses 125.58 times over. This is a positive sign as it shows the company's ability to comfortably meet its interest obligations.

In the previous year, as of December 31, 2022, the interest coverage ratio was even higher at 183.43, suggesting a further improvement in the company's ability to service its debt. However, in December 31, 2021, the interest coverage ratio dropped to 140.46, but still remained at a healthy level.

It is worth noting that there was a significant decline in the interest coverage ratio as of December 31, 2020, where the ratio turned negative to -530.78. This indicates that the company's operating income was insufficient to cover its interest expenses during that period, which may raise concerns about the company's financial health.

In the year ending December 31, 2019, the interest coverage ratio was 36.01, which, although lower than the more recent years, still indicates that the company had a reasonable ability to pay its interest expenses.

Overall, the trend in the interest coverage ratio for Magnolia Oil & Gas Corp has been positive, with the exception of the significant decline in 2020. It is important for investors and stakeholders to monitor this ratio closely to ensure that the company continues to generate enough operating income to cover its interest expenses and maintain its financial stability.