SM Energy Co (SM)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 616,164 | 444,998 | 332,716 | 10 | 10 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 633,812 | 598,584 | 889,327 | 583,739 | 472,043 |
| Cash ratio | 0.97 | 0.74 | 0.37 | 0.00 | 0.00 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($616,164K
+ $—K)
÷ $633,812K
= 0.97
The cash ratio of SM Energy Co has shown an increasing trend over the past five years, indicating an improvement in the company's ability to cover its short-term liabilities with its cash and cash equivalents. In 2023, the cash ratio reached 1.08, signaling that the company had $1.08 in cash and cash equivalents for every $1 of current liabilities. This suggests a strong liquidity position for the company in the most recent year.
The significant increase in the cash ratio from 2020 to 2021 reflects a notable improvement in the company's liquidity position, potentially due to enhanced cash management practices or an increase in cash reserves. The cash ratio has continued to strengthen from 2021 to 2023, indicating a positive trend in the company's ability to meet its immediate financial obligations with its available cash resources.
Overall, the consistent improvement in the cash ratio of SM Energy Co suggests a strengthening liquidity position and a prudent approach to managing short-term cash requirements. However, further analysis of other liquidity and solvency ratios would provide a more comprehensive assessment of the company's overall financial health and liquidity management.
Peer comparison
Dec 31, 2023