Antero Resources Corp (AR)

Antero Resources Corp's liquidity ratios have exhibited a declining trend over the past five years. The current ratio, which measures the company's ability to meet short-term liabilities with its current assets, decreased from 0.89 in 2019 to 0.33 in 2023. This indicates a significant decrease in the company's ability to cover its short-term obligations with its current assets.

Similarly, the quick ratio, also known as the acid-test ratio, dropped from 0.89 in 2019 to 0.33 in 2023. This ratio excludes inventory from current assets, providing a more stringent measure of liquidity. The decreasing trend in the quick ratio suggests that Antero Resources Corp may have struggled to meet its immediate liabilities without relying on inventory.

The cash ratio, which is the most stringent measure of liquidity as it only considers cash and cash equivalents, also declined from 0.72 in 2019 to 0.30 in 2023. This indicates that the company has become less capable of meeting its short-term obligations solely with its available cash resources.

Overall, the declining trend in all three liquidity ratios suggests that Antero Resources Corp may be facing challenges in maintaining sufficient liquid assets to cover its short-term liabilities. It is crucial for the company to closely monitor and improve its liquidity position to ensure its financial stability and ability to meet its obligations in a timely manner.

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Additional liquidity measure

The cash conversion cycle of Antero Resources Corp has fluctuated over the past five years. In 2023, the cash conversion cycle was 3.32 days, showing an increase from the previous year's 1.81 days. This indicates that the company took longer to convert its investments in inventory and receivables into cash during the year.

Comparing this to 2021, when the cash conversion cycle was 6.24 days, we see an improvement in efficiency in 2023. However, the company's performance in 2023 was still not as favorable as in 2020, when the cash conversion cycle was 2.97 days.

In 2019, the cash conversion cycle was at its highest at 14.21 days, indicating inefficiency in managing working capital during that period. The significant decrease in the following years highlights the company's efforts to streamline its operations and improve its cash flow management.

Overall, the trend in Antero Resources Corp's cash conversion cycle shows some variability, but with the most recent year showing a slight deterioration in efficiency compared to the prior year. Management should continue to focus on optimizing working capital management to enhance the company's financial performance.