MP Materials Corp (MP)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Cash | US$ in thousands | 263,351 | 136,627 | 1,179,300 | 519,652 |
| Short-term investments | US$ in thousands | 734,493 | 1,045,720 | — | — |
| Receivables | US$ in thousands | 29,331 | 35,057 | 51,009 | 3,589 |
| Total current liabilities | US$ in thousands | 108,550 | 97,481 | 59,543 | 43,061 |
| Quick ratio | 9.46 | 12.49 | 20.66 | 12.15 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($263,351K
+ $734,493K
+ $29,331K)
÷ $108,550K
= 9.46
The quick ratio of MP Materials Corporation has exhibited fluctuations over the past four years. The quick ratio was 9.54 in 2023, representing a decrease from the previous year's ratio of 12.68 in 2022. Despite this decrease, the quick ratio remains relatively high, indicating that the company maintains a strong ability to cover its short-term liabilities with its most liquid assets.
Comparing the quick ratio to 2021 and 2020, where it was 20.79 and 12.28 respectively, it is apparent that there have been notable variations in the company's liquidity position. The sharp decline from 20.79 in 2021 to 12.68 in 2022 suggests a potential change in the composition of current assets, such as a decrease in liquid assets relative to current liabilities.
Overall, while the recent decline in the quick ratio may warrant further investigation into the company's liquidity management, the consistently high ratios over the years demonstrate MP Materials Corporation's historically strong ability to meet its short-term obligations with its quick assets.
Peer comparison
Dec 31, 2023