MP Materials Corp (MP)
Quick ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 263,351 | 547,668 | 927,245 | 651,215 | 136,627 | 427,969 | 664,457 | 1,233,300 | 1,179,300 | 1,179,370 | 1,196,880 | 1,181,520 | 519,652 | 30,244 | 38,551 | 5,378 |
| Short-term investments | US$ in thousands | 734,493 | 536,994 | 200,828 | 517,831 | 1,045,720 | 836,288 | 599,666 | — | — | — | — | — | — | — | — | — |
| Receivables | US$ in thousands | 29,331 | 17,308 | 15,233 | 22,972 | 35,057 | 19,875 | 37,019 | 37,108 | 51,009 | 37,095 | 8,178 | 13,925 | 3,589 | — | — | — |
| Total current liabilities | US$ in thousands | 108,550 | 97,012 | 75,773 | 93,874 | 97,481 | 74,746 | 66,147 | 51,575 | 59,543 | 70,767 | 90,287 | 72,921 | 43,061 | 3,533 | 1,072 | 547 |
| Quick ratio | 9.46 | 11.36 | 15.09 | 12.70 | 12.49 | 17.18 | 19.67 | 24.63 | 20.66 | 17.19 | 13.35 | 16.39 | 12.15 | 8.56 | 35.96 | 9.83 |
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 shown a decreasing trend over the past four quarters, indicating a potential decline in the company's ability to meet its short-term obligations using its most liquid assets.
The quick ratio, which measures the firm's ability to cover its current liabilities with its most liquid assets, has decreased from 24.76 in Q1 2022 to 9.54 in Q4 2023. This significant decline suggests that the company may be facing challenges in maintaining a sufficient level of liquid assets relative to its current liabilities.
While a quick ratio above 1.0 is generally considered healthy, the declining trend observed for MP Materials Corporation raises concerns about its liquidity position. Investors and stakeholders may want to investigate further into the company's management of working capital and evaluate its ability to generate sufficient cash flows to meet its short-term obligations.
Peer comparison
Dec 31, 2023