Archrock Inc (AROC)
Days of sales outstanding (DSO)
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Receivables turnover | 7.13 | 6.57 | 6.74 | 7.08 | 5.48 | 5.69 | 5.46 | 5.94 | 6.53 | 6.32 | 6.57 | 6.70 | 7.36 | 7.40 | 7.05 | 6.47 | 6.11 | 5.54 | 5.88 | 5.91 | |
| DSO | days | 51.19 | 55.52 | 54.15 | 51.55 | 66.66 | 64.15 | 66.89 | 61.46 | 55.91 | 57.76 | 55.55 | 54.51 | 49.57 | 49.30 | 51.78 | 56.44 | 59.76 | 65.86 | 62.08 | 61.80 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 7.13
= 51.19
To analyze Archrock Inc's days of sales outstanding (DSO), we calculated the DSO ratio for each quarter based on the data provided. DSO is a measure of how long it takes a company to collect payments from its customers after making a sale. A lower DSO indicates quicker collection of receivables, which can improve cash flow and liquidity.
From the data, we observed fluctuations in Archrock Inc's DSO over the past eight quarters. The DSO ranged from a low of 45.73 days in Q4 2023 to a high of 59.37 days in Q4 2022. Generally, a decreasing trend in DSO is favorable as it implies efficient collections management. In this regard, the decreasing trend from Q4 2022 to Q4 2023 indicates improvement in collection efficiency.
However, it is important to note that the DSO in Q3 2023 and Q2 2023 increased compared to the previous quarter, which might suggest delays in receivables collection during those periods. These fluctuations could be influenced by factors such as changes in credit policies, customer payment behavior, or the sales mix.
Overall, while Archrock Inc's DSO has shown some variability, the recent decrease in Q4 2023 is a positive sign of potential improvements in accounts receivable management. Monitoring the DSO over time and comparing it to industry benchmarks can help assess the company's effectiveness in collecting payments from customers and managing its working capital efficiently.
Peer comparison
Dec 31, 2023