Northern Oil & Gas Inc (NOG)

Looking at the liquidity ratios of Northern Oil and Gas Inc., we can see a trend of improvement over the past five years.

The current ratio measures the company's ability to meet its short-term obligations with its current assets. Northern Oil and Gas Inc. has shown a consistent increase in its current ratio from 0.65 in 2019 to 1.32 in 2023. This indicates that the company has been able to strengthen its liquidity position and is better positioned to cover its short-term liabilities.

The quick ratio, also known as the acid-test ratio, excludes inventory from current assets to provide a more conservative measure of liquidity. Similar to the current ratio, the quick ratio has also shown a notable improvement from 0.65 in 2019 to 1.32 in 2023. This suggests that Northern Oil and Gas Inc. has ample liquid assets to cover its short-term obligations without relying on selling inventory.

The cash ratio specifically measures the company's ability to pay off its current liabilities using only cash and cash equivalents. While this ratio is generally lower compared to the current and quick ratios, the trend for Northern Oil and Gas Inc. has been positive, with the cash ratio increasing from 0.12 in 2019 to 0.35 in 2023. This indicates that the company has been able to build up its cash reserves over the years, further strengthening its ability to meet short-term obligations.

Overall, the liquidity ratios for Northern Oil and Gas Inc. demonstrate a healthy financial position with improving liquidity over the years, suggesting that the company has been effectively managing its short-term financial obligations.

---

Additional liquidity measure

The cash conversion cycle of Northern Oil and Gas Inc. has exhibited fluctuations over the past five years. In 2023, the company's cash conversion cycle stood at 62.98 days, showing a slight improvement compared to the previous year. This suggests that the company was able to convert its investments in inventory back into cash more efficiently.

In 2022, the cash conversion cycle was 63.14 days, indicating a relatively stable performance compared to the previous year. However, there was a significant improvement from 2021, where the cycle was 142.18 days, implying that the company had challenges in managing its cash flow and inventory turnover during that period.

In 2020, Northern Oil and Gas Inc. displayed a cash conversion cycle of 46.94 days, which was shorter compared to the previous years. This suggests that the company was efficient in managing its working capital and converting inventory into sales during that period.

In 2019, the cash conversion cycle was 83.82 days, indicating a longer time frame compared to 2020 and showcasing a potential area for improvement in managing working capital efficiency.

Overall, the trend in Northern Oil and Gas Inc.'s cash conversion cycle shows some variability over the years, with fluctuations in the efficiency of converting investments in inventory into cash. Understanding these fluctuations can help in assessing the company's working capital management and overall operational efficiency.