MP Materials Corp (MP)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 282,442 | 263,351 | 136,627 | 1,179,300 | 519,652 |
| Short-term investments | US$ in thousands | 568,426 | 734,493 | 1,045,720 | 0 | — |
| Total current liabilities | US$ in thousands | 164,019 | 108,550 | 97,481 | 59,543 | 43,061 |
| Cash ratio | 5.19 | 9.19 | 12.13 | 19.81 | 12.07 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($282,442K
+ $568,426K)
÷ $164,019K
= 5.19
The cash ratio, which measures a company's ability to cover its short-term liabilities with its cash and cash equivalents, for MP Materials Corp has shown fluctuations over the years.
As of December 31, 2020, the cash ratio was 12.07, indicating that the company had $12.07 in cash and cash equivalents for every $1 of current liabilities. This suggests a strong liquidity position.
By December 31, 2021, the cash ratio increased significantly to 19.81, reflecting an even stronger ability to meet short-term obligations with available cash resources.
However, by December 31, 2022, the cash ratio dropped to 12.13, but it still remained above the industry average, indicating a healthy liquidity position.
The cash ratio further decreased to 9.19 by December 31, 2023, which might suggest a slight decrease in the company's ability to cover short-term obligations with cash alone.
By December 31, 2024, the cash ratio declined to 5.19, signaling a significant decrease in liquidity compared to the previous years. This could indicate that the company might be facing challenges in maintaining adequate cash reserves to cover its short-term liabilities.
Overall, the trend in MP Materials Corp's cash ratio shows fluctuations, with periods of strong liquidity followed by some declines in liquidity position in later years. The company may need to closely monitor its cash position to ensure it can meet its short-term financial obligations effectively.
Peer comparison
Dec 31, 2024