Archrock Inc (AROC)
Payables 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 |
| Payables | US$ in thousands | 61,026 | 64,324 | 38,920 | 30,819 | 60,215 |
| Payables turnover | 9.41 | 8.48 | 12.34 | 19.67 | 10.66 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $574,333K ÷ $61,026K
= 9.41
The payables turnover ratio measures how efficiently Archrock Inc is managing its trade payables by showing how many times a year the company pays off its suppliers. A higher payables turnover ratio indicates that the company is paying its suppliers more quickly.
Looking at the historical trend of Archrock Inc's payables turnover, we observe fluctuations over the past five years. In 2023, the payables turnover ratio increased to 7.36 from 6.52 in 2022, indicating that the company paid its suppliers more frequently in 2023. This change could be due to various factors such as changes in payment terms with suppliers, operational efficiency, or changes in business strategy.
However, the payables turnover ratios in 2023 and 2022 are lower compared to 2021 when the ratio was 9.22, suggesting that the company took longer to pay its suppliers in these years. The significant decrease in 2020 to 12.24 indicates that Archrock Inc was paying its suppliers much more quickly that year, possibly to manage cash flow during the challenging economic conditions of the COVID-19 pandemic.
In comparison, the payables turnover ratio in 2019 was 7.58, similar to 2023, indicating a relatively stable payment behavior towards suppliers in that year.
Overall, the trend in Archrock Inc's payables turnover shows variability in how the company manages its trade payables, with fluctuations in payment frequency over the past five years. This variability could be influenced by changes in the company's financial position, business environment, or strategic decisions regarding supplier relationships.
Peer comparison
Dec 31, 2023