Quick Ratio

The quick ratio measures a company’s ability to cover its short-term obligations using its most liquid assets, such as cash and receivables.

At 0.48x, FANG currently has less than half a dollar of liquid assets for every dollar of short-term debt, which is below the sector median of 0.72x and places the stock in the 27th percentile among peers. The metric has been increasing over the last eight quarters, but the year-over-year change is not available, and the quarter-over-quarter change shows a slight decline of -2.0% from 0.49x to 0.48x. The combination of a low quick ratio (below the sector median) with a recent small decline suggests that while liquidity has improved from a severe low of 0.04x, the company still faces short-term financial risk. This profile of a below-average but improving metric supports the overall NEUTRAL verdict, as the weakness is partially offset by the upward trend from an extremely distressed level.

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