SM Energy Co (SM)

Current 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
Total current assets	US$ in thousands	916,439	702,552	678,985	756,276	737,203	807,778	633,133	758,835	613,187	336,270	269,410	230,282	203,669	274,890	355,469	625,160	252,634	311,114	288,734	221,334
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
Current ratio		1.45	1.17	1.20	1.34	1.23	0.99	0.62	0.72	0.69	0.30	0.26	0.30	0.35	0.73	1.15	1.63	0.54	0.63	0.57	0.41

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 exhibited fluctuations over the past eight quarters, ranging from a low of 0.62 in Q2 2022 to a high of 1.45 in Q4 2023. Generally, a current ratio above 1 indicates that a company has sufficient current assets to cover its current liabilities.

The company's current ratio has shown improvement since Q2 2022, with a noticeable increase in Q4 2022 and a further increase in Q4 2023. This indicates that SM Energy Co has strengthened its liquidity position and is better equipped to meet its short-term obligations.

However, it is important to note that the current ratio dipped below 1 in Q3 2022, suggesting a potential liquidity strain during that period. An ideal current ratio may vary by industry, but a consistently improving trend is generally positive and indicates enhanced financial stability.

Overall, the recent trend of increasing current ratio values for SM Energy Co suggests an improved liquidity position, which can provide investors and stakeholders with confidence in the company's ability to manage its short-term obligations.