Antero Resources Corp (AR)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | 3,845.98 | 5,217.26 | 1,021.06 |
| Days of sales outstanding (DSO) | days | 2.90 | 3.32 | 1.81 | 6.24 | 2.97 |
| Number of days of payables | days | — | — | 86.48 | 37.85 | 10.03 |
| Cash conversion cycle | days | 2.90 | 3.32 | 3,761.31 | 5,185.65 | 1,014.00 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 2.90 – —
= 2.90
The cash conversion cycle of Antero Resources Corp has shown significant fluctuations over the years based on the provided data. As of December 31, 2020, the company had a cash conversion cycle of 1,014.00 days, indicating a lengthy period between spending cash on production or inventory and receiving cash from the sale of goods or services. This extended cycle suggests potential issues with managing working capital efficiently.
By December 31, 2021, the cash conversion cycle had surged to 5,185.65 days, a substantial increase from the previous year. Such a dramatic spike indicates notable challenges in converting investments in raw materials and inventory into cash inflows from sales.
In the following year, the company managed to reduce the cash conversion cycle to 3,761.31 days, although the cycle still remains significantly lengthy. This improvement demonstrates efforts to enhance working capital management, but further optimization is likely required to streamline the conversion process effectively.
By December 31, 2023, Antero Resources Corp had made remarkable progress in its cash conversion cycle, reducing it to just 3.32 days. This sharp decline suggests enhanced efficiency in converting investments into cash inflows, reflecting improved working capital management practices.
As of December 31, 2024, the cash conversion cycle further decreased to 2.90 days, indicating a continued focus on optimizing working capital operations. A lower cash conversion cycle is generally favorable as it signifies the company's ability to quickly convert investments into cash, potentially enhancing liquidity and overall financial performance.
In conclusion, the fluctuations in Antero Resources Corp's cash conversion cycle over the years highlight the importance of effectively managing working capital to ensure efficient operations and financial stability. The company's progress in reducing the cycle duration demonstrates efforts to improve cash flow management and optimize liquidity within the business.
Peer comparison
Dec 31, 2024