Matador Resources Company (MTDR)

Matador Resources Company's solvency ratios show a mixed trend over the past five years. The Debt-to-assets ratio decreased from 0.21 in 2020 to 0.08 in 2022 before increasing to 0.31 in 2024, indicating fluctuations in the company's ability to cover its liabilities with its assets.

The Debt-to-capital ratio followed a similar pattern, decreasing from 0.38 in 2020 to 0.13 in 2022, then rising to 0.40 in 2024. This suggests varying levels of financial leverage and capital structure efficiency in the company during the period under review.

The Debt-to-equity ratio declined significantly from 0.60 in 2020 to 0.15 in 2022 before jumping to 0.65 in 2024. This indicates changes in the proportion of debt and equity financing in the company's capital structure over the years.

Finally, the Financial leverage ratio peaked at 2.87 in 2020, decreased to 1.79 in 2022, and slightly increased to 2.13 in 2024. This ratio reflects the company's risk of insolvency and its dependence on borrowed funds to finance its operations.

Overall, the solvency ratios of Matador Resources Company demonstrate fluctuating levels of leverage and financial risk, highlighting the importance of closely monitoring the company's debt management and capital structure decisions to maintain a healthy financial position.

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Coverage ratios

Based on the data provided, the interest coverage ratio of Matador Resources Company has exhibited significant fluctuations over the years.

At the end of December 31, 2020, the interest coverage ratio was -7.33, indicating that the company's earnings were insufficient to cover its interest expenses. This could raise concerns about the company's ability to meet its debt obligations using its current earnings.

However, by the end of December 31, 2021, the interest coverage ratio improved significantly to 9.83, suggesting that Matador Resources Company's earnings were nearly ten times the amount needed to cover its interest expenses. This is a positive development, indicating a stronger financial position compared to the previous year.

Subsequently, by December 31, 2022, the interest coverage ratio further increased to 25.02, indicating a substantial improvement in the company's ability to cover its interest payments with its earnings. This signals a healthier financial position and suggests that the company has more than enough earnings to comfortably meet its interest obligations.

By the end of December 31, 2023, the interest coverage ratio slightly decreased to 9.49, but it still remains at a favorable level, indicating that the company's earnings are sufficient to cover its interest expenses.

Finally, as of December 31, 2024, the interest coverage ratio spiked to 81.98, signifying a significant increase in the company's ability to cover its interest payments with its earnings. This indicates a very strong financial position and suggests that Matador Resources Company has ample earnings to comfortably meet its interest obligations and potentially invest in growth opportunities.

Overall, the trend in Matador Resources Company's interest coverage ratio shows improvements over the years, with significant fluctuations but generally moving towards a more favorable position, which is a positive indicator of the company's financial health and ability to manage its debt obligations.