Northern Oil & Gas Inc (NOG)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.92 | 1.23 | 0.89 | 0.96 | 1.32 | 0.78 | 1.02 | 1.15 | 0.93 | 0.99 | 0.60 | 0.52 | 0.66 | 0.47 | 0.46 | 0.66 | 0.69 | 1.08 | 1.14 | 1.51 |
| Quick ratio | 0.02 | 0.08 | 0.02 | 0.08 | 0.02 | 0.02 | 0.04 | 0.02 | 0.01 | 0.02 | 0.00 | 0.01 | 0.03 | 0.01 | 0.02 | 0.02 | 0.01 | 0.01 | 0.01 | 0.04 |
| Cash ratio | 0.02 | 0.08 | 0.02 | 0.08 | 0.02 | 0.02 | 0.04 | 0.02 | 0.01 | 0.02 | 0.00 | 0.01 | 0.03 | 0.01 | 0.02 | 0.02 | 0.01 | 0.01 | 0.01 | 0.04 |
Northern Oil & Gas Inc's liquidity ratios indicate its ability to meet short-term financial obligations. The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has shown fluctuating trends over the years. While the current ratio was relatively healthy in the beginning of the analysis period in early 2020, it deteriorated significantly towards the end of 2021 and early 2022. However, there was a subsequent improvement in the current ratio in the later periods, reaching levels above 1.0 in 2023 and 2024, indicating a stronger ability to cover its short-term obligations.
On the other hand, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, shows a consistently low level throughout the analysis period. The quick ratio remained below 0.1 for most of the time, indicating a limited ability to cover short-term obligations without relying on inventory.
Similarly, the cash ratio, which is the most conservative measure of liquidity focusing only on cash and cash equivalents, also remains at very low levels throughout the period. This suggests that Northern Oil & Gas Inc may face challenges in meeting immediate obligations with its available cash resources alone.
Overall, while the current ratio has shown improvement in recent periods, the quick ratio and cash ratio indicate potential liquidity challenges for Northern Oil & Gas Inc, highlighting the importance of carefully managing working capital and short-term cash flow.
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 46.95 | 56.15 | 24.11 | 0.00 | 0.00 | 0.00 | 8.30 | 5.51 | 1.15 | 3.22 | 61.30 | 124.19 | 145.41 | 216.16 |
The cash conversion cycle of Northern Oil & Gas Inc has shown varying trends over the years. Initially, in March 2020, the company had a cash conversion cycle of 216.16 days, indicating a lengthy period between paying for raw materials and receiving cash from sales. However, by December 2021, the cycle had significantly improved to 8.30 days, suggesting better management of working capital.
Subsequently, the company managed to reduce the cash conversion cycle to almost zero in the following quarters of March, June, and September 2022. This indicates that the company was able to efficiently convert its investments in inventory and receivables back into cash with minimal delay.
However, there was a slight increase in the cash conversion cycle by December 2022 and March 2023, possibly due to changes in the company's operations or external factors affecting its cash management efficiency. The cycle then decreased again in June 2023, showing a positive trend in working capital management.
In the most recent quarters of September 2023 and December 2023, the company managed to achieve a cash conversion cycle of zero days, suggesting that it was able to operate on a cash-neutral basis during these periods.
Overall, the analysis of Northern Oil & Gas Inc's cash conversion cycle highlights the company's efforts to improve operational efficiency and manage working capital effectively to enhance cash flow and financial performance.