Archrock Inc (AROC)

Payables turnover

		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
Cost of revenue (ttm)	US$ in thousands	618,971	601,693	585,320	577,879	574,333	570,786	567,702	565,518	545,568	527,072	510,129	488,070	480,287	479,324	465,974	526,308	663,472	560,341	607,701	584,343
Payables	US$ in thousands	57,567	70,120	43,976	48,717	61,026	52,000	65,333	78,999	64,324	89,602	78,108	70,878	38,920	44,685	45,096	35,190	30,819	29,021	35,545	62,289
Payables turnover		10.75	8.58	13.31	11.86	9.41	10.98	8.69	7.16	8.48	5.88	6.53	6.89	12.34	10.73	10.33	14.96	21.53	19.31	17.10	9.38

December 31, 2024 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $618,971K ÷ $57,567K
= 10.75

The payables turnover ratio measures how many times a company pays off its accounts payable within a specific period. A higher payables turnover indicates that the company is managing its payables efficiently.

Analyzing Archrock Inc's payables turnover from March 31, 2020, to December 31, 2024, we can see fluctuations in the ratio over time. The ratio increased from 9.38 on March 31, 2020, to a peak of 21.53 on December 31, 2020, indicating an improvement in managing payables during this period.

However, the payables turnover ratio started to decline from March 31, 2021, reaching a low of 5.88 on September 30, 2022. This decline suggests that Archrock Inc took longer to pay off its accounts payable during this period, potentially indicating liquidity issues or changes in payment terms with suppliers.

From March 31, 2023, to December 31, 2024, the payables turnover ratio recovered slightly, fluctuating between 7.16 and 13.31. This improvement indicates that Archrock Inc may have addressed the issues impacting its payables turnover and returned to a more efficient payment cycle.

Overall, the trend in Archrock Inc's payables turnover ratio reveals periods of efficient payables management as well as challenges that impacted the company's ability to settle its accounts payable in a timely manner. Monitoring this ratio can help investors and stakeholders assess the company's liquidity, financial health, and supplier relationships.