Antero Midstream Partners LP (AM) is a partnership formed by Antero Resources Corporation to provide midstream energy assets. Antero Resources owns more than 65% of its capital stock. Their main operations are gathering pipelines and compression systems, which include the exploitation and production of natural gas, and delivery.
2. Financial Ratio Analysis:
Antero Midstream Partners LP had a current ratio of 0.76:1 for 2015 and 3.35:1 for 2014, revealing that the liquidity of the company has decreased. In this case, the 2015 ratio demonstrates that Antro might have trouble meeting its short-term obligations because the ratio is less than 1, current liabilities are greater than current assets (Investopedia, “Current Ratio”). Meanwhile, the …show more content…
Although this number seems alarming because it is relatively low compared to other industries, it is not bad since Antero performs like a utility company when it delivers natural gas to residents. On the other hand, the decrease that Antero faced on the return on asset ratio from 2014 10.68% to 2015 8.38% exhibits that it's in trouble. For a growth company like Antero, failing to generate returns on its assets puts the company at high risk because it invests its assets in order to achieve higher revenue. The increase in accounts receivable from 2014 to 2015 testifies to this. On the contrary, the return on common stock increased from 10.87% to 11.77% from 2014 to 2015. It is good that the ratio increased because Antero depends on the growth of its company with the money that stockholders have invested (Investopedia, “Return On Equity”). For the Earnings per share ratio, Antero obtained an EPS ratio of $0.15 for 2015 and $0.16 for 2014. Antero maintained about the same EPS in a one year difference because they do not pay preferred dividends. This shows stability because the EPS number went down after the outstanding shares increased. It would of been alarming if profit had gone down, which it did
2. Financial Ratio Analysis:
Antero Midstream Partners LP had a current ratio of 0.76:1 for 2015 and 3.35:1 for 2014, revealing that the liquidity of the company has decreased. In this case, the 2015 ratio demonstrates that Antro might have trouble meeting its short-term obligations because the ratio is less than 1, current liabilities are greater than current assets (Investopedia, “Current Ratio”). Meanwhile, the …show more content…
Although this number seems alarming because it is relatively low compared to other industries, it is not bad since Antero performs like a utility company when it delivers natural gas to residents. On the other hand, the decrease that Antero faced on the return on asset ratio from 2014 10.68% to 2015 8.38% exhibits that it's in trouble. For a growth company like Antero, failing to generate returns on its assets puts the company at high risk because it invests its assets in order to achieve higher revenue. The increase in accounts receivable from 2014 to 2015 testifies to this. On the contrary, the return on common stock increased from 10.87% to 11.77% from 2014 to 2015. It is good that the ratio increased because Antero depends on the growth of its company with the money that stockholders have invested (Investopedia, “Return On Equity”). For the Earnings per share ratio, Antero obtained an EPS ratio of $0.15 for 2015 and $0.16 for 2014. Antero maintained about the same EPS in a one year difference because they do not pay preferred dividends. This shows stability because the EPS number went down after the outstanding shares increased. It would of been alarming if profit had gone down, which it did