SM Energy Co (SM)

Current ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total current assets	US$ in thousands	916,439	737,203	613,187	203,669	252,634
Total current liabilities	US$ in thousands	633,812	598,584	889,327	583,739	472,043
Current ratio		1.45	1.23	0.69	0.35	0.54

December 31, 2023 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $916,439K ÷ $633,812K
= 1.45

The current ratio of SM Energy Co has shown an increasing trend over the past five years, indicating improvements in the company's short-term liquidity position. The ratio has increased from 0.54 in 2019 to 1.45 in 2023, reflecting the company's ability to meet its short-term obligations more effectively.

A current ratio above 1 indicates that the company has more current assets than current liabilities, which is generally considered a positive sign of financial health and solvency. SM Energy Co's current ratio has steadily improved, reaching a relatively healthy level in 2023.

The significant increase in the current ratio from 2020 to 2021 suggests that the company may have managed its current assets and liabilities more efficiently during that period. The current ratio exceeding 1.0 in the most recent year indicates that SM Energy Co may be in a better position to cover its short-term obligations and fund its operations using its current assets.

Overall, the improving trend of SM Energy Co's current ratio over the past five years indicates a strengthened liquidity position, potentially reducing the company's short-term financial risks and enhancing its ability to weather economic downturns or unexpected challenges.