Archrock Inc (AROC)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 574,333 | 545,568 | 480,287 | 606,173 | 642,141 |
| Inventory | US$ in thousands | 81,761 | 84,622 | 72,869 | 63,670 | 74,467 |
| Inventory turnover | 7.02 | 6.45 | 6.59 | 9.52 | 8.62 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $574,333K ÷ $81,761K
= 7.02
In the past five years, Archrock Inc's inventory turnover ratio has exhibited some fluctuations. The inventory turnover ratio measures how efficiently a company manages its inventory by indicating the number of times it sells and replaces its inventory during a specific period.
Archrock Inc's inventory turnover ratio decreased from 6.13 in 2019 to 5.92 in 2020, suggesting a slight decline in the efficiency of inventory management. However, the ratio has since shown improvement, reaching 4.93 in 2021, 4.96 in 2022, and further increasing to 5.49 in 2023.
The increasing trend in the inventory turnover ratio indicates that Archrock Inc has been more efficient in managing its inventory in recent years, with the company selling and replacing its inventory at a faster pace. This improvement may be attributed to better inventory control, more accurate demand forecasting, and effective inventory management strategies implemented by the company. Overall, the rising trend in the inventory turnover ratio reflects positively on Archrock Inc's operational efficiency in managing its inventory levels.
Peer comparison
Dec 31, 2023