MP Materials Corp (MP)
Current ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 1,131,180 | 1,293,830 | 1,276,810 | 561,047 |
| Total current liabilities | US$ in thousands | 108,550 | 97,481 | 59,543 | 43,061 |
| Current ratio | 10.42 | 13.27 | 21.44 | 13.03 |
December 31, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $1,131,180K ÷ $108,550K
= 10.42
The current ratio of MP Materials Corporation has shown a decreasing trend over the last four years. The ratio was at its highest in 2021 at 21.44, indicating a strong ability to cover short-term obligations with current assets. However, there was a significant decrease in the current ratio in 2022 and 2023, with the ratio dropping to 13.27 and 10.42 respectively.
While the current ratio remains above 1, indicating that MP Materials Corporation still has more than enough current assets to cover its short-term liabilities, the downward trend raises some concerns about the company's liquidity position. A higher current ratio is generally preferred as it suggests a stronger short-term financial position.
Further analysis of the company's current assets and liabilities is recommended to understand the factors contributing to the declining current ratio and to assess any potential liquidity risks that MP Materials Corporation may face in the future.
Peer comparison
Dec 31, 2023