Matador Resources Company (MTDR)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.04 | 1.86 | 0.80 | 0.90 | 0.70 |
| Quick ratio | 0.77 | 1.67 | 0.62 | 0.67 | 0.57 |
| Cash ratio | 0.08 | 0.88 | 0.10 | 0.20 | 0.10 |
Matador Resources Co's liquidity ratios show fluctuations over the past five years. The current ratio, which measures the company's ability to cover short-term liabilities with current assets, decreased significantly from 1.86 in 2022 to 1.04 in 2023. This suggests a potential weakening ability to meet short-term obligations.
The quick ratio, a more stringent measure of liquidity as it excludes inventory from current assets, also exhibited a downward trend from 1.76 in 2022 to 0.91 in 2023. This indicates a reduced ability to meet short-term liabilities without relying on selling inventory.
Moreover, the cash ratio, which measures the company's ability to cover immediate liabilities with cash and cash equivalents, decreased notably from 0.97 in 2022 to 0.22 in 2023. This reveals a decreased liquidity position in terms of cash availability to cover short-term obligations.
Overall, the declining trend in the liquidity ratios of Matador Resources Co, especially in 2023, raises concerns about the company's ability to meet its short-term financial obligations using its current assets and available cash. Management may need to closely monitor and improve liquidity management practices to ensure financial stability in the future.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 22.98 | -19.22 | 2.20 | 56.41 | 7.84 |
The cash conversion cycle of Matador Resources Co has varied over the past five years. In 2023, the company's cash conversion cycle increased to 67.81 days from 57.01 days in 2022. This suggests that Matador Resources took longer to convert its investments in inventory and accounts receivable into cash during 2023.
Comparing 2023 to 2021, the cash conversion cycle increased by 16.99 days, indicating a significant deterioration in the efficiency of the company's cash conversion cycle. However, the cycle in 2023 was lower than in 2020 and 2019, possibly reflecting improvements in working capital management.
Overall, the trend in the cash conversion cycle for Matador Resources Co shows some fluctuations over the past five years, with 2023 experiencing a slight increase compared to the previous year. This metric is essential for assessing a company's operational efficiency and liquidity management.