Archrock Inc (AROC)
Payables turnover
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 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 | 366,553 | 350,243 | 228,307 | 114,936 |
| Payables | US$ in thousands | 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 | 60,215 | 62,510 | 58,759 | 71,252 |
| Payables turnover | 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 | 6.09 | 5.60 | 3.89 | 1.61 |
December 31, 2023 calculation
Payables turnover = Cost of revenue (ttm) ÷ Payables
= $574,333K ÷ $61,026K
= 9.41
The payables turnover for Archrock Inc has fluctuated over the past eight quarters, ranging from a low of 4.48 in Q3 2022 to a high of 8.57 in Q3 2023. The payables turnover ratio indicates how efficiently the company is managing its trade payables by measuring the number of times a company pays off its average accounts payable balance during a specific period.
A higher payables turnover ratio suggests that the company is paying off its suppliers more frequently, which could indicate effective cash management or potentially advantageous payment terms negotiated with suppliers. On the other hand, a lower ratio may suggest inefficient payment practices, possible liquidity issues, or extended payment terms with suppliers.
In the case of Archrock Inc, the payables turnover has generally been above 5 throughout the eight quarters, which indicates a relatively efficient management of trade payables. The increasing trend in the most recent quarters, peaking at 8.57 in Q3 2023, suggests that the company has been improving its payables turnover and managing its payables more effectively. This could be a positive indicator of strong supplier relationships, improved cash flow management, or negotiating better payment terms.
Overall, a consistent and increasing payables turnover ratio for Archrock Inc implies efficient management of trade payables, which can positively impact the company's working capital and financial stability.
Peer comparison
Dec 31, 2023