Expand Energy Corp. (NASDAQ:EXE)

The analysis of liquidity ratios over the presented periods reveals notable fluctuations and trends in the company's short-term financial stability and liquidity management.

Current Ratio

The current ratio exhibits a distinct pattern over the years. Initially, from March 2021 to December 2021, it remains below 1, indicating potential short-term liquidity stress, with values ranging from 0.69 to 0.86. A sharp decline is observed at the start of 2022, reaching 0.34 in March 2022, which marks the lowest point in the series, suggesting a significant reduction in current assets relative to current liabilities at that time. Following this trough, the ratio improves steadily and substantially throughout 2022 and into early 2024, reaching a peak of 2.33 in June 2024, indicating enhanced liquidity and a strong buffer of current assets. However, after this peak, the ratio declines markedly into 2025, dropping below 1 again at 0.64 by March 2025, which could imply renewed liquidity concerns or strategic changes affecting working capital.

Quick Ratio

The quick ratio follows a similar trajectory to the current ratio but starts and remains at slightly lower values initially, signifying a more conservative measure excluding inventory. From March 2021 to December 2021, values fluctuate modestly between 0.67 and 0.83, reflecting limited immediate liquidity. It dips to a low of 0.32 in March 2022, mirroring the current ratio's low point, before improving through 2022 and early 2024, peaking at 1.55 in September 2024. This upward trend highlights improved ability to cover short-term liabilities with more liquid assets. Similar to the current ratio, the quick ratio experiences a decline in 2025, decreasing to 0.5 by March, which denotes a reduction in readily available liquid assets compared to short-term obligations.

Cash Ratio

The cash ratio shows more volatility and lower initial values compared to the other liquidity measures, reflecting the company's relatively limited immediate cash or cash equivalents available to cover current liabilities. Starting at around 0.28 in March 2021, it declines sharply to nearly 0 in early 2022, indicating a critical scarcity of cash resources at that point. A significant recovery trend begins mid-2022, with the ratio increasing to a high of 1.25 by December 2024, demonstrating a substantial buildup in cash reserves relative to short-term liabilities. However, a steep decline occurs again in 2025 with the cash ratio falling back to approximately 0.12 by March, suggesting that cash availability has diminished considerably, potentially due to operational factors or changes in cash management policies.

Overall, the period exhibits a cycle of liquidity contraction followed by considerable recovery and strengthening through 2022 to 2024, with all three ratios reaching their highest points. Nevertheless, the sharp declines observed in early 2025 across all ratios may warrant careful attention as they might signal emerging liquidity challenges or shifts in working capital strategy. The data suggests that while the company has demonstrated capability to improve its liquidity positions markedly, maintaining that level may be subject to external or internal influences that negatively impact cash and current asset management.

The quarterly financial data reveals notable fluctuations in the liquidity position of the company over the analyzed periods. The current assets and current liabilities have exhibited significant variation, influencing the current ratio and thus the short-term financial health.

Current Assets

Current assets demonstrated an overall upward trend from March 31, 2021, reaching a peak at December 31, 2021, with values increasing from 1,190 million USD to 2,103 million USD. This peak was followed by fluctuations, with another high point in December 31, 2022 (2,698 million USD). Thereafter, there was a general decline in the first three quarters of 2024 before a moderate recovery by March 31, 2025 (2,113 million USD).

Current Liabilities

Current liabilities showed considerable volatility, starting at 1,443 million USD in March 2021 and rising sharply to 4,392 million USD by March 31, 2022. This peak was succeeded by a marked reduction throughout 2022 and 2023, reaching a low of 899 million USD in September 2024. However, liabilities surged again by the end of 2024 and into the first quarter of 2025, climbing to 3,589 million USD.

Current Ratio

The current ratio indicated the company's liquidity position as poor to moderate initially, declining from 0.82 in March 2021 to a low of 0.34 in March 2022, reflecting an increasingly strained liquidity condition at that time. Following this low, the liquidity improved significantly, with the current ratio exceeding 1.0 from December 2022 through September 2024, reaching a peak of 2.33 in March 2024. This suggests a period of strong short-term financial stability. However, in the last two quarters analyzed, the current ratio dropped sharply back below 1.0, reaching 0.59 by March 2025, indicating a return to tighter liquidity conditions.

In summary, the data reflects a cyclical pattern in liquidity, with periods of both significant strength and weakness. The company experienced considerable volatility in current liabilities, which largely influenced the shifts in the current ratio. The peaks in current assets and improved liquidity ratios suggest episodes of accumulated working capital buffer, but the recent declines in both current assets and ratios caution toward emerging short-term liquidity risks going into the first quarter of 2025.

The data reveals distinct fluctuations in the company's liquidity position over the examined periods. Total quick assets and current liabilities exhibit considerable volatility, which directly impacts the quick ratio, an indicator of short-term financial health.

Total quick assets

Quick assets display a generally increasing trend from March 2021 through December 2021, rising from 1,112 million USD to 2,029 million USD. Subsequently, values fluctuate, peaking again around mid-2022 at 1,887 million USD and then declining and varying between approximately 1,061 million USD and 1,746 million USD toward the end of 2023. From early 2024 to the first quarter of 2025, quick assets remain relatively stable, oscillating around 1,300 to 1,800 million USD, ending at 1,788 million USD.

Current liabilities

Current liabilities increase sharply from 1,443 million USD in March 2021 to a significant peak of 4,392 million USD in March 2022, more than doubling within a year. After this peak, liabilities decrease steadily, reaching a trough of 899 million USD by September 2024. However, the final two quarters show a notable rebound to 3,123 million USD and 3,589 million USD respectively by March 2025.

Quick ratio

The quick ratio follows the interaction between quick assets and current liabilities closely, starting at 0.77 in the first quarter of 2021 and declining to a low of 0.32 by March 2022, coinciding with the spike in current liabilities. Thereafter, the ratio recovers progressively, reaching a peak of 1.55 in the third quarter of 2024, indicating improved liquidity. The last two quarters, however, reveal a sharp decline back to approximately 0.5, signaling a deterioration in the short-term liquidity position.

In summary, the company experienced significant liquidity stress around early 2022, characterized by a rapid rise in current liabilities and a corresponding drop in the quick ratio. The period following this saw a recovery in liquidity as liabilities diminished and the quick ratio improved markedly through 2023 and most of 2024. Nonetheless, the latest data shows a concerning reversal, with current liabilities rising sharply again and the quick ratio falling below 1.0, implying potential short-term liquidity constraints as of the first quarter of 2025.

Total Cash Assets

Total cash assets exhibited notable fluctuations over the observed period. Starting at $408 million in March 2021, there was a steady increase reaching a peak of $914 million by December 2021. However, a sharp decline followed in early 2022, bottoming out at $26 million in June 2022. Subsequently, cash assets showed a general recovery trend, spiking significantly to $1,254 million by June 2024. After that peak, the value decreased again, ending at $427 million in the first quarter of 2025.

Current Liabilities

Current liabilities displayed a somewhat volatile but overall declining pattern in the latter half of the period. Beginning at $1,443 million in March 2021, liabilities escalated substantially, reaching a high of $4,392 million in March 2022. Following this peak, there was a gradual reduction in liabilities, dropping steadily to $899 million by September 2024. However, liabilities then increased sharply again in the last two recorded quarters, ending at $3,589 million in March 2025.

Cash Ratio

The cash ratio, which measures liquidity by comparing cash assets to current liabilities, fluctuated considerably in line with movements in cash and liabilities. During 2021, the ratio improved moderately, starting from 0.28 in March and reaching 0.37 by December. Early 2022 marked a period of very low liquidity, with ratios close to 0.01, reflecting the simultaneous spike in liabilities and drop in cash assets. From late 2022 through mid-2024, there was a marked improvement in the cash ratio, peaking at 1.25 in September 2024, indicating strong liquidity. In the final quarters observed, the ratio fell sharply to 0.12 by March 2025, signaling a decline in immediate cash coverage for liabilities.

Overall Insights

The data reveals periods of financial stress and recovery, particularly in early 2022 and at the end of the timeline. The company experienced substantial volatility in liquidity, with cash levels and current liabilities moving inversely at critical points. The significant rise in liabilities coupled with a dramatic fall in cash assets during early 2022 negatively impacted liquidity ratios. Conversely, from late 2022 to mid-2024, the recovery of cash assets and reduction in liabilities improved the liquidity position markedly. The sharp reversal in the last two quarters of the dataset suggests a renewed pressure on short-term financial stability that may require attention. These patterns suggest cyclical financial challenges affecting the company's liquidity and operational flexibility over the examined period.