Magnolia Oil & Gas Corp (MGY)

Debt-to-capital ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Long-term debt	US$ in thousands	392,513	392,839	390,383	388,087	391,115
Total stockholders’ equity	US$ in thousands	1,913,560	1,691,650	1,576,030	816,733	548,136
Debt-to-capital ratio		0.17	0.19	0.20	0.32	0.42

December 31, 2024 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $392,513K ÷ ($392,513K + $1,913,560K)
= 0.17

Based on the provided data, Magnolia Oil & Gas Corp's debt-to-capital ratio has shown a decreasing trend over the past five years. As of December 31, 2020, the ratio stood at 0.42, indicating that 42% of the company's capital was financed through debt.

By December 31, 2024, the debt-to-capital ratio had decreased to 0.17, reflecting a significant improvement in the company's debt management. This suggests that Magnolia Oil & Gas Corp has been reducing its reliance on debt financing and increasingly using equity to fund its operations and investments.

A decreasing debt-to-capital ratio is generally viewed positively by investors and creditors as it signifies a stronger financial position and lower financial risk. It indicates that the company is becoming less leveraged and more capable of meeting its financial obligations using its own resources.

Overall, Magnolia Oil & Gas Corp's declining debt-to-capital ratio from 2020 to 2024 indicates a prudent financial strategy aimed at enhancing the company's long-term sustainability and financial stability.