Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Operating Profit Margin since 2012
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Liquidity Ratios (Summary)
Diamondback Energy Inc., liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
- Current Ratio
- The current ratio exhibits notable fluctuations over the analyzed periods. It generally remains below the threshold of 1.0, indicating limited short-term liquidity relative to current liabilities. Early in the series, from March 2017 to September 2017, the ratio declines from 0.81 to 0.46, reaching a low point. It then improves significantly to 1.10 by September 2018, suggesting a temporary strengthening of working capital. Following this peak, the ratio decreases again until the end of 2020, with the lowest levels near 0.45–0.49. From 2021 onwards, there is an upward trend peaking above 1.0 at year-end 2021, before declining again to 0.61 by September 2022. Overall, the ratio reflects inconsistent liquidity management with short-term asset coverage of liabilities often below 1.0.
- Quick Ratio
- The quick ratio pattern largely parallels the current ratio but remains consistently lower, underscoring limited immediate liquidity when inventories are excluded. Initial values show a decline from 0.72 in March 2017 to 0.44 in September 2017. A substantial recovery follows, peaking at 1.07 in September 2018, corresponding with the increase observed in the current ratio. The subsequent period through late 2020 sees a decline to a minimum of 0.32 in September 2020, indicating reduced liquid assets besides inventories. Post-2020, there is a moderate recovery making the ratio approach 0.93 by March 2022 before decreasing again to 0.49 in September 2022. The fluctuations suggest variability in liquid asset levels and reliance on less liquid current assets.
- Cash Ratio
- The cash ratio remains notably low throughout the timeframe, underscoring limited availability of the most liquid assets to cover current liabilities. Starting at 0.15 in March 2017, the ratio fluctuates with minor peaks reaching 0.70 in September 2018, coinciding with improvements observed in other liquidity measures. However, the general trend is downward after this peak, with values frequently below 0.10 from 2019 through late 2020, indicating constrained cash reserves. A moderate upward movement is noted into early 2021, reaching a high of 0.47, but declines sharply thereafter to reach as low as 0.02 by September 2022. This trend suggests limited cash holdings relative to obligations, potentially increasing short-term liquidity risk.
- Summary of Liquidity Trends
- Across all three liquidity ratios, the data reveals a pattern of volatility and generally constrained liquidity. There are episodic improvements in mid-2018 and early 2021 periods that point to temporary increases in working capital and liquid assets. Nonetheless, the prevailing condition throughout the observed periods is a level of liquidity that often falls below the benchmark of 1.0 for current and quick ratios, and remains very low for cash ratio. This indicates that the company frequently operates with modest short-term asset coverage, limited liquid reserves, and possible vulnerability to short-term financial stresses without quick access to cash.
Current Ratio
Diamondback Energy Inc., current ratio calculation (quarterly data)
| 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 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Current assets | ||||||||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||||||
| Liquidity Ratio | ||||||||||||||||||||||||||||||
| Current ratio1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Current Ratio, Competitors2 | ||||||||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||||||||
| ConocoPhillips | ||||||||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||||||||
| Occidental Petroleum Corp. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in liquidity metrics over the examined periods.
- Current Assets
- Current assets exhibited a general upward trend from early 2017 through late 2018, increasing from 199 million US dollars in March 2017 to a peak of 925 million US dollars in December 2018. Subsequently, current assets fluctuated, reaching the highest level observed at 1,464 million US dollars in June 2021 before declining to 1,031 million US dollars by September 2022. These fluctuations suggest periods of both asset accumulation and reduction, reflecting changes in working capital components over time.
- Current Liabilities
- Current liabilities consistently increased over the analyzed timeframe, starting at 244 million US dollars in March 2017 and rising significantly to a range between approximately 1,600 and 1,900 million US dollars from early 2021 onward. The liability balance peaked in June 2021 at 1,972 million US dollars, before slightly decreasing to 1,640 million US dollars by September 2022. This steady growth in short-term obligations indicates rising claims on current assets, which could impact liquidity.
- Current Ratio
- The current ratio, calculated as current assets divided by current liabilities, showed considerable variability between quarters. Initial values ranged below 1.0, indicating potential liquidity constraints through 2017 and 2018, with the ratio dipping as low as 0.45 in September 2020. A temporary improvement occurred toward the end of 2021, where the ratio approached 1.01, suggesting a balance between assets and liabilities. However, this was followed by another decline, with the ratio finishing at 0.61 by September 2022. Overall, the ratio mostly remained below the generally accepted benchmark of 1.0, implying ongoing liquidity challenges and limited short-term financial flexibility.
In summary, current assets demonstrated growth and volatility while current liabilities steadily increased, leading to a mostly suboptimal current ratio throughout the periods. The data indicates that the company experienced varying levels of liquidity pressure, with limited improvement in short-term asset coverage of liabilities, which warrants attention for managing working capital effectively.
Quick Ratio
Diamondback Energy Inc., quick ratio calculation (quarterly data)
| 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 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Cash and cash equivalents | ||||||||||||||||||||||||||||||
| Restricted cash | ||||||||||||||||||||||||||||||
| Accounts receivable, joint interest and other, net | ||||||||||||||||||||||||||||||
| Accounts receivable, oil and natural gas sales, net | ||||||||||||||||||||||||||||||
| Total quick assets | ||||||||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||||||
| Liquidity Ratio | ||||||||||||||||||||||||||||||
| Quick ratio1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Quick Ratio, Competitors2 | ||||||||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||||||||
| ConocoPhillips | ||||||||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||||||||
| Occidental Petroleum Corp. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Quick Assets
- Total quick assets exhibited fluctuations over the reported periods, with values ranging from a low of 171 million US dollars in the second quarter of 2017 to a peak of 1,342 million US dollars in the third quarter of 2021. Initial values from 2017 showed moderate variation, increasing notably in the second half of 2018, reaching a high of 773 million US dollars in the third quarter of that year. Following this, total quick assets declined through 2020, hitting a low near 390 million US dollars in the third quarter. From 2021 onward, there was a significant upward trend, culminating in the highest recorded value in the third quarter of 2021, before slightly decreasing towards the last reported quarter in 2022.
- Current Liabilities
- Current liabilities demonstrated a steady increase over the period analyzed. Starting at 244 million US dollars in the first quarter of 2017, liabilities rose consistently, surpassing 1,000 million US dollars by the end of 2018. Notably, the highest values appeared between 2021 and 2022, peaking at 1,996 million US dollars in the fourth quarter of 2021 before descending moderately to 1,640 million US dollars in the third quarter of 2022. The data indicate a general upward pressure on liabilities, despite some reductions after late 2021.
- Quick Ratio
- The quick ratio trends reflect changing liquidity conditions corresponding to variations in quick assets and current liabilities. The ratio started below 1.0 across all periods, indicating that liquid assets were consistently less than current liabilities. It declined from 0.72 in the first quarter of 2017 to as low as 0.32 in the third quarter of 2020, suggesting weakening liquidity during that interval. There was a recovery observed from late 2020 through 2021, with the quick ratio rising to a peak of 0.93 in the fourth quarter of 2021, which indicates improved short-term financial stability. However, the ratio decreased again into 2022, falling to 0.49 by the third quarter, marking a reduction in liquidity relative to liabilities toward the latter part of the period.
Cash Ratio
Diamondback Energy Inc., cash ratio calculation (quarterly data)
| 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 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Cash and cash equivalents | ||||||||||||||||||||||||||||||
| Restricted cash | ||||||||||||||||||||||||||||||
| Total cash assets | ||||||||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||||||
| Liquidity Ratio | ||||||||||||||||||||||||||||||
| Cash ratio1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Cash Ratio, Competitors2 | ||||||||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||||||||
| ConocoPhillips | ||||||||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||||||||
| Occidental Petroleum Corp. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets experienced notable fluctuations over the analyzed periods. Starting relatively low at 37 million USD in March 2017, cash assets declined to 17 million USD in June 2017 before gradually increasing to a peak of 508 million USD in September 2018. This peak was followed by a decline to 100 million USD by September 2019 and another period of volatility through 2020. From 2021 onwards, cash assets showed a renewed upward trend, reaching a high of 672 million USD in December 2021, before decreasing sharply to 34 million USD by September 2022.
- Current Liabilities
- Current liabilities displayed a consistent upward trajectory throughout the periods. Beginning at 244 million USD in March 2017, liabilities increased steadily and peaked at 1996 million USD in September 2021. Although there was a slight reduction to 1438 million USD in December 2021, liabilities again rose to 1678 million USD by September 2022. The continuous rise in liabilities highlights growing short-term obligations over the analyzed timeframe.
- Cash Ratio
- The cash ratio, which measures liquidity by comparing cash assets to current liabilities, demonstrated significant variability. Initially at 0.15 in March 2017, it declined to a low of 0.05 in June 2017, then increased markedly to 0.7 in September 2018, reflecting improved liquidity during that quarter. Post the peak, the ratio declined again, often remaining below 0.1 in many quarters across 2019 and 2020. In 2021, the ratio increased once more, reaching 0.47 in December, indicating relatively higher liquidity. However, the ratio decreased sharply again to 0.02 by September 2022, the lowest point in the analyzed data, implying a weaker liquidity position in that quarter.
- Summary Insights
- The data reveal cyclical liquidity trends characterized by significant peaks and troughs in cash assets and cash ratio, juxtaposed against a steady increase in current liabilities. Despite intermittent improvements in cash holdings and liquidity ratios, the general increase in liabilities suggests growing short-term financial obligations. The low cash ratios in multiple quarters emphasize periods where liquidity might have been constrained relative to current liabilities. The sharp decline in both cash assets and cash ratio towards the end of the period warrants attention, indicating potential liquidity pressures during the latest quarter.