MP Materials Corp (MP)

Solvency ratios

	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
Debt-to-assets ratio	0.29	0.29	0.30	0.30	0.30	0.31	0.32	0.34	0.36	0.36	0.37	0.38	0.00
Debt-to-capital ratio	0.33	0.33	0.33	0.33	0.34	0.35	0.37	0.38	0.40	0.41	0.43	0.43	0.00
Debt-to-equity ratio	0.50	0.49	0.50	0.50	0.52	0.55	0.58	0.62	0.67	0.71	0.74	0.77	0.00
Financial leverage ratio	1.71	1.69	1.68	1.69	1.70	1.76	1.79	1.82	1.87	1.94	2.01	2.04	1.26

The solvency ratios of MP Materials Corporation demonstrate consistent stability over the past eight quarters. The debt-to-assets ratio has remained relatively steady between 0.29 and 0.34, indicating that the company's level of debt in relation to its total assets has not significantly fluctuated. Similarly, the debt-to-capital ratio has remained within a narrow range of 0.33 to 0.38, showing that the proportion of debt used to finance the company's operations has been maintained at a consistent level.

The debt-to-equity ratio, measuring the extent of debt financing relative to equity, has shown a gradual decrease from 0.62 in Q1 2022 to 0.49 in Q3 2023, reflecting a positive trend towards lower reliance on debt for funding. The financial leverage ratio, which indicates the degree of financial risk borne by the company, has also decreased slightly from 1.82 in Q1 2022 to 1.69 in Q3 2023, suggesting improved financial stability and lower leverage.

Overall, the solvency ratios of MP Materials Corporation demonstrate prudent management of debt and capital structure, with a gradual reduction in reliance on debt financing over time. These consistent ratios indicate a stable financial position and effective risk management practices within the company.

Coverage ratios

	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
Interest coverage	-3.37	9.74	28.28	46.82	56.59	50.00	38.62	27.17	18.99	15.25	11.78	-2.88	-6.88

Interest coverage is a crucial financial ratio that indicates a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio is generally considered favorable as it suggests that the company is better positioned to meet its interest obligations.

From the data provided, we observe fluctuations in MP Materials Corporation's interest coverage ratio over the past eight quarters. In Q4 2023, the interest coverage ratio was a negative 3.37, indicating that the company's operating income was insufficient to cover its interest expenses during that period. This is a concerning sign as it suggests financial distress and an inability to meet debt obligations.

However, in the preceding quarters, the interest coverage ratio showed significant improvements, reaching a high of 56.65 in Q4 2022. This signifies a strong ability to cover interest expenses with operating income during that quarter.

Overall, the trend in MP Materials Corporation's interest coverage ratio has been mixed, with periods of both strong and weak performance. It is essential for investors and stakeholders to monitor this ratio closely to assess the company's financial health and ability to manage its debt obligations effectively.