Archrock Inc (AROC)

Days of inventory on hand (DOH)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Inventory turnover		6.90	7.13	7.39	7.19	7.02	6.49	6.10	6.31	6.45	6.27	6.57	6.63	6.59	7.19	7.07	7.97	10.42	8.58	8.56	8.01
DOH	days	52.89	51.18	49.41	50.76	51.96	56.24	59.88	57.85	56.61	58.23	55.55	55.04	55.38	50.74	51.61	45.79	35.03	42.54	42.64	45.56

December 31, 2024 calculation

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

The Days of Inventory on Hand (DOH) for Archrock Inc has fluctuated over the past few years, ranging from a low of 35.03 days on December 31, 2020, to a high of 59.88 days on June 30, 2023. The DOH represents the average number of days it takes for the company to sell its inventory, with higher values indicating that inventory is being held for a longer period.

The trend in Archrock Inc's DOH shows a general increase from 2020 to 2023, suggesting that the company may be experiencing challenges in managing its inventory efficiently or potentially facing slower inventory turnover. This could lead to increased holding costs and potential risks related to obsolescence or potential inventory writedowns.

However, there was a slight decline in DOH towards the end of 2024, which may indicate improvements in inventory management practices. It is essential for Archrock Inc to closely monitor its inventory levels and ensure that they are aligned with sales demand to optimize working capital and overall operational efficiency. A strategic approach to inventory management can help the company maintain a healthy balance between carrying enough inventory to meet customer needs while minimizing holding costs and maximizing cash flow.