MP Materials Corp (MP)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | 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 | — |
| Receivables | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 164,019 | 108,550 | 97,481 | 59,543 | 43,061 |
| Quick ratio | 5.19 | 9.19 | 12.13 | 19.81 | 12.07 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($282,442K
+ $568,426K
+ $—K)
÷ $164,019K
= 5.19
The quick ratio of MP Materials Corp has exhibited fluctuations over the years. As of December 31, 2020, the quick ratio stood at 12.07, indicating the company had a strong ability to cover its short-term liabilities with its most liquid assets. The ratio significantly improved by the end of 2021 to 19.81, reflecting an even stronger liquidity position.
However, by the end of 2022, the quick ratio dropped to 12.13, still maintaining a relatively healthy level of liquidity. Subsequently, there was a notable decline in the quick ratio to 9.19 by December 31, 2023, suggesting a potential decrease in the company's ability to meet short-term obligations with its quick assets.
By the end of 2024, the quick ratio further decreased to 5.19, indicating a significant decline in liquidity compared to the previous years. This decrease may raise concerns about MP Materials Corp's short-term liquidity and ability to cover immediate obligations efficiently.
Overall, fluctuations in the quick ratio of MP Materials Corp over the years suggest a varying ability to meet short-term liabilities with its liquid assets, emphasizing the importance of closely monitoring liquidity management strategies to ensure financial stability.
Peer comparison
Dec 31, 2024