Matador Resources Company (MTDR)

The solvency ratios of Matador Resources Co over the past five years reflect a mix of performance in terms of the company's ability to meet its long-term financial obligations.

The debt-to-assets ratio has shown fluctuations ranging from 0.21 to 0.49, indicating the proportion of total assets financed by debt. The ratio has generally been moderate, indicating that Matador Resources has leveraged debt as a funding source without overburdening its asset base.

The debt-to-capital ratio, measuring the proportion of total capitalization that is debt-based, has also displayed variation from 0.27 to 0.59. This ratio suggests that the company has maintained a reasonable level of leverage relative to its total capital structure, balancing debt and equity sources effectively.

The debt-to-equity ratio has shown significant fluctuation from 0.37 to 1.41 over the period, with a peak in 2020. This indicates varying levels of reliance on debt financing compared to equity. The company's higher debt-to-equity ratios in some years may indicate higher financial risk associated with its capital structure.

The financial leverage ratio, reflecting the extent to which a company's operations are funded by creditors versus shareholders, has ranged from 1.79 to 2.87. The increasing trend in this ratio over the years may signify a higher reliance on debt financing to support operations and growth.

In conclusion, Matador Resources Co's solvency ratios reflect a balanced approach to capital structure management, with variations observed in different years. The company has maintained a moderate level of debt relative to its assets and capital, although the fluctuating debt-to-equity and financial leverage ratios warrant attention to ensure sustainable solvency and financial stability.

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Coverage ratios

The interest coverage ratio of Matador Resources Co has displayed fluctuations over the past five years, indicating varying levels of ability to cover its interest expenses with its earnings before interest and taxes (EBIT).

In 2023, the interest coverage ratio stands at 9.95, reflecting a decrease from the previous year. While still above 1, which generally indicates that the company is able to meet its interest obligations, the ratio has decreased significantly compared to the strong ratio of 26.19 in 2022.

The significant improvement in 2022 from the prior years suggests that Matador Resources Co experienced a notable increase in its ability to cover its interest expenses with its EBIT. This improvement contrasts with the lower ratios in 2020 and 2019, which were 2.13 and 3.19, respectively, indicating potential challenges in meeting interest obligations during those years.

Overall, the fluctuating trend in Matador Resources Co's interest coverage ratio calls for further analysis of the company's financial performance and its ability to generate sufficient earnings to cover its interest costs consistently.