Matador Resources Company (MTDR)

Debt-to-assets ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Long-term debt	US$ in thousands	2,206,630	465,000	485,000	774,000	1,294,420
Total assets	US$ in thousands	7,727,000	5,554,500	4,262,150	3,687,280	4,069,680
Debt-to-assets ratio		0.29	0.08	0.11	0.21	0.32

December 31, 2023 calculation

Debt-to-assets ratio = Long-term debt ÷ Total assets
= $2,206,630K ÷ $7,727,000K
= 0.29

The debt-to-assets ratio of Matador Resources Co has fluctuated over the past five years, ranging from 0.21 to 0.49. A lower ratio indicates a lower level of financial risk as it suggests that the company relies less on debt financing and has a higher proportion of assets financed by equity.

In 2023, the debt-to-assets ratio decreased to 0.29 from 0.36 in 2021, indicating improved financial health as the company reduced its reliance on debt. This trend suggests that Matador Resources Co may have improved its capital structure by increasing equity financing or paying down debt.

It is important to note that a lower debt-to-assets ratio is generally viewed positively by investors and creditors as it signifies a stronger financial position and lower default risk. However, a very low ratio may also indicate underutilization of debt which could limit the company's growth potential. Conversely, a high ratio, such as in 2020 with a ratio of 0.49, may signal increased financial risk and lower financial flexibility due to higher debt levels relative to total assets.

Overall, the fluctuation in Matador Resources Co's debt-to-assets ratio over the years highlights the importance of monitoring the company's capital structure and debt management strategies to ensure a balanced approach between debt and equity financing.