Expand Energy Corp. (NASDAQ:EXE)

The current ratio for the period under review demonstrates significant fluctuation. Initially, the ratio was below one, then rose substantially before declining again. A detailed examination of the components and the resulting ratio is presented below.

Current Ratio Trend

The current ratio began at 0.86 in 2021, indicating that current liabilities exceeded current assets. It increased to 1.00 in 2022, signifying a balance between current assets and current liabilities. A substantial increase followed in 2023, with the ratio reaching 1.99, suggesting a strong ability to cover short-term obligations. However, the ratio decreased significantly in 2024 to 0.64, returning to a level below one and indicating a potential liquidity concern.

Current Assets

Current assets increased from US$2,103 million in 2021 to US$2,698 million in 2022, representing a growth of approximately 28%. A slight decrease was observed in 2023, with current assets at US$2,609 million. A more pronounced decline occurred in 2024, falling to US$1,997 million. This decrease in current assets contributed to the ratio’s decline in the most recent year.

Current Liabilities

Current liabilities increased modestly from US$2,447 million in 2021 to US$2,704 million in 2022. A substantial decrease was noted in 2023, with current liabilities falling to US$1,314 million. However, current liabilities increased significantly in 2024, reaching US$3,123 million. This increase in current liabilities, coupled with the decrease in current assets, drove the current ratio down in 2024.

The volatility in the current ratio suggests changes in the company’s working capital management or short-term financing strategies. The decline in 2024 warrants further investigation to determine the underlying causes and potential implications for the company’s short-term financial health.