Antero Midstream Partners LP (AM)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 5,737,620 | 5,791,320 | 5,544,000 | 5,610,910 | 6,282,880 |
| Total stockholders’ equity | US$ in thousands | 2,151,730 | 2,192,320 | 2,286,700 | 2,418,290 | 3,143,410 |
| Financial leverage ratio | 2.67 | 2.64 | 2.42 | 2.32 | 2.00 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $5,737,620K ÷ $2,151,730K
= 2.67
The financial leverage ratio of Antero Midstream Corp has shown a consistent upward trend over the past five years, increasing from 2.00 in 2019 to 2.67 in 2023. This indicates that the company has been increasingly relying on debt to finance its operations and growth. A higher financial leverage ratio suggests a higher level of debt compared to equity in the company's capital structure, which can amplify returns on equity but also increase financial risk.
While a higher financial leverage ratio can potentially boost profits during good times, it also leaves the company more vulnerable to economic downturns or changes in interest rates. It is important for investors and stakeholders to closely monitor the company's ability to service its debt obligations and manage its financial leverage effectively to avoid financial distress. It may also be advisable for the company to consider diversifying its sources of financing or implementing strategies to reduce its reliance on debt in order to mitigate potential risks associated with high leverage.
Peer comparison
Dec 31, 2023