Archrock Inc (AROC)

Days of sales outstanding (DSO)

		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
Receivables turnover		8.62	6.96	8.43	8.75	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
DSO	days	42.34	52.46	43.27	41.72	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

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 8.62
= 42.34

Days of Sales Outstanding (DSO) is a crucial financial metric that measures the average number of days a company takes to collect revenue after a sale is made. For Archrock Inc, DSO has shown some fluctuations over the past few years.

From March 31, 2020, to March 31, 2024, the DSO for Archrock Inc fluctuated within a range of 41.72 days to 66.89 days. The trend in DSO shows some variations, indicating changes in the company's efficiency in collecting accounts receivable.

There are noticeable peaks and troughs in the DSO trend. For instance, the DSO increased from 41.72 days on March 31, 2024, to 52.46 days on September 30, 2024, marking a significant increase in the time taken to collect sales. This could suggest challenges in collecting outstanding invoices during that period.

However, there are also periods where the DSO decreased, such as the decline from 66.89 days on June 30, 2022, to 51.55 days on March 31, 2023. A decrease in DSO generally indicates an improvement in the company's collection efficiency.

Overall, monitoring DSO over time can provide insights into Archrock Inc's effectiveness in managing its accounts receivable and liquidity. Analyzing the reasons behind fluctuations in DSO can help assess the company's credit policies, customer payment behavior, and potential risks related to revenue collection. It is essential for stakeholders to track DSO trends to ensure the company maintains healthy cash flows and working capital management.