Archrock Inc (AROC)

The Days Sales Outstanding (DSO) is a crucial ratio that measures the average number of days a company takes to collect revenue after making a sale.

Analyzing the DSO trend of Archrock Inc over the past five years, we can observe the following:
- As of December 31, 2020, the DSO stood at 49.12 days, indicating that on average, it took the company around 49 days to collect revenue from its sales.
- By December 31, 2021, the DSO increased to 54.44 days, suggesting a slight delay in the collection of receivables compared to the previous year.
- The DSO further increased to 63.97 days by December 31, 2022, indicating that the company took almost 64 days on average to collect revenue, which might raise concerns about its liquidity and efficiency in managing receivables.
- However, by December 31, 2023, the DSO decreased to 50.94 days, showing an improvement in collecting revenue within a shorter timeframe compared to the previous year.
- The most recent data as of December 31, 2024, shows a significant drop in DSO to 41.25 days, indicating a notable improvement in the company's collection efficiency.

Overall, the fluctuation in Archrock Inc's DSO over the years suggests varying levels of effectiveness in managing accounts receivable and collecting revenue promptly. The decreasing trend in the most recent period is a positive sign, potentially reflecting better cash flow management and operational efficiency. However, it is essential for the company to continue monitoring and optimizing its receivables collection process to maintain financial health and stability.

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Dec 31, 2024