Archrock Inc (AROC)

Days of inventory on hand (DOH)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover		6.90	7.02	6.45	6.59	9.52
DOH	days	52.89	51.96	56.61	55.38	38.34

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 6.90
= 52.89

Days of Inventory on Hand (DOH) is an important metric that indicates how efficiently a company is managing its inventory. A higher DOH value suggests that the company is taking longer to sell its inventory, which may tie up working capital and increase the risk of obsolescence.

In the case of Archrock Inc, the trend in the DOH over the past five years shows an increase from 38.34 days as of December 31, 2020, to 52.89 days as of December 31, 2024. This upward trend indicates that Archrock Inc is taking longer to turn its inventory into sales over the years.

The DOH of 55.38 days as of December 31, 2021, further increased to 56.61 days as of December 31, 2022. Although there was a slight decrease in DOH to 51.96 days as of December 31, 2023, it remained higher compared to the initial values.

Overall, the upward trend in Archrock Inc's DOH indicates that the company may be facing challenges in efficiently managing its inventory levels and converting them into sales within a reasonable timeframe. This trend warrants further investigation into the company's inventory management practices and strategies to optimize working capital utilization and minimize the risk of excess inventory.