SM Energy Co (SM)

Cash ratio

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cash and cash equivalents	US$ in thousands	616,164	401,980	378,238	477,869	444,998	498,435	267,089	419,887	332,716	29,800	0	0	10	10	10	15	10	10	12	14
Short-term investments	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total current liabilities	US$ in thousands	633,812	599,084	563,988	563,146	598,584	814,017	1,013,750	1,058,720	889,327	1,103,570	1,051,670	776,619	583,739	377,278	307,900	383,463	472,043	491,042	503,945	545,342
Cash ratio		0.97	0.67	0.67	0.85	0.74	0.61	0.26	0.40	0.37	0.03	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	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 fluctuated over the past eight quarters, ranging from a low of 0.30 in Q2 2022 to a high of 1.08 in Q4 2023. The cash ratio measures the company's ability to cover its current liabilities with its available cash and cash equivalents. A higher cash ratio indicates a stronger liquidity position, as the company has more cash on hand relative to its short-term obligations.

In Q4 2023, SM Energy Co had a cash ratio of 1.08, indicating that it had more than enough cash to cover its current liabilities. This could be seen as a positive sign of financial strength and stability. However, the company's cash ratio dropped to 0.73 in Q3 2023 before rebounding to 0.82 in Q2 2023 and further increasing to 1.01 in Q1 2023.

On the other hand, the company experienced lower cash ratios in the earlier quarters, with ratios of 0.84 in Q4 2022, 0.68 in Q3 2022, and a significant drop to 0.30 in Q2 2022, indicating potential liquidity challenges during that period. However, the cash ratio improved to 0.41 in Q1 2022, showing some recovery.

Overall, the trend in SM Energy Co's cash ratio indicates variability in its liquidity position over the past two years. It would be important to continue monitoring the company's cash ratio to assess its ability to meet short-term obligations and maintain financial stability.