Antero Midstream Partners LP (AM)

Solvency ratios provide insights into a company's ability to meet its long-term financial obligations. Let's analyze the solvency ratios of Antero Midstream Corp over the past five years:

1. Debt-to-assets ratio:
The debt-to-assets ratio for Antero Midstream Corp has ranged from 0.46 to 0.58 over the past five years, with a decreasing trend until 2020 followed by a slight increase. This ratio indicates the proportion of the company's assets financed by debt, showing that, on average, 56% to 58% of their assets were funded by debt.

2. Debt-to-capital ratio:
The debt-to-capital ratio has fluctuated between 0.48 and 0.61 from 2019 to 2023. This ratio reflects the proportion of the company's capital structure that is financed by debt. Antero Midstream Corp's debt contribution to its capital structure has been in the range of 48% to 61%, with an increasing trend.

3. Debt-to-equity ratio:
The debt-to-equity ratio has shown an increasing trend from 2019 to 2023, ranging from 0.92 to 1.53. This ratio represents the amount of debt financing relative to equity financing in the company's capital structure. The higher ratio in recent years indicates a higher reliance on debt financing compared to equity.

4. Financial leverage ratio:
The financial leverage ratio has increased steadily over the past five years, from 2.00 in 2019 to 2.67 in 2023. This ratio reflects the company's ability to use debt to finance its operations and investments. The increasing trend suggests greater financial risk as the company relies more on debt for its operations.

Overall, the solvency ratios of Antero Midstream Corp indicate a moderate to high level of reliance on debt financing, with an increasing trend in recent years. This trend suggests that the company's financial risk has been growing as it utilizes more debt in its capital structure. Analyzing these ratios helps in understanding the company's financial health and its ability to meet its long-term obligations.

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Coverage ratios

Antero Midstream Corp's interest coverage ratio has exhibited a declining trend over the past five years, decreasing from 4.39 in 2020 to 3.33 in 2023. This indicates that the company's ability to cover its interest expenses with its operating profits has been weakening. Despite this downward trajectory, the interest coverage ratio has generally remained above 3 in each year, signifying that the company has generated earnings sufficient to cover its interest obligations by at least three times. However, the slight decrease in this ratio over the years may suggest a potential strain on Antero Midstream Corp's ability to meet its interest payments in the long term if the trend persists. It would be prudent for stakeholders to monitor this metric closely to ensure the company maintains a healthy balance between its earnings and interest obligations.