Viper Energy Ut (VNOM)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 4.89 | 4.32 | 5.41 | 4.54 | 1.20 |
| Quick ratio | 0.55 | 0.78 | 0.83 | 1.61 | 0.43 |
| Cash ratio | 0.55 | 0.78 | 0.83 | 1.61 | 0.43 |
For Viper Energy Ut, the liquidity ratios have shown varying trends over the past five years.
1. Current Ratio: The company's current ratio has increased from 1.20 in 2020 to 4.89 in 2024. The current ratio indicates the company's ability to cover its short-term obligations with its current assets. An increasing trend in the current ratio suggests improved liquidity and better financial health.
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, has fluctuated over the years. It was 0.43 in 2020, increased to 1.61 in 2021, but then decreased to 0.55 in 2024. The quick ratio provides a more stringent measure of liquidity by excluding inventory from current assets. The declining trend in the quick ratio indicates a potential decrease in the company's ability to meet its short-term obligations without relying on selling inventory.
3. Cash Ratio: The cash ratio, which measures the company's ability to cover its current liabilities with cash and cash equivalents, has followed a similar trend to the quick ratio. It was 0.43 in 2020, increased to 1.61 in 2021, but then decreased to 0.55 in 2024. A higher cash ratio implies a stronger ability to settle short-term liabilities with readily available cash.
Overall, while Viper Energy Ut's current ratio has shown a consistent improvement over the years, the quick ratio and cash ratio have displayed volatility. It would be important for stakeholders to closely monitor these ratios, especially the quick and cash ratios, to ensure that the company maintains adequate liquidity to meet its short-term obligations effectively.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 0.00 | 0.66 | 60.40 | 0.00 | 0.00 |
The cash conversion cycle of Viper Energy Ut has shown fluctuations over the years. It remained stable at 0.00 days at the end of 2020 and 2021. However, there was a significant increase to 60.40 days at the end of 2022, indicating a delay in converting inventory to cash during that period. Subsequently, there was a substantial improvement as it decreased to 0.66 days at the end of 2023, suggesting a more efficient management of working capital. The cycle returned to 0.00 days by the end of 2024, reflecting a swift conversion of inventory to cash. Overall, although there was a temporary slowdown in 2022, the company managed to optimize its cash conversion cycle effectively in subsequent years.