Archrock Inc (AROC)

Activity ratios

Short-term

Turnover ratios

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
Inventory turnover 7.02 6.49 6.10 6.31 6.45 6.27 6.57 6.63 6.59 7.19 7.07 7.97 10.42 8.58 8.56 8.01 4.92 4.47 3.08 1.59
Receivables turnover 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 6.11 5.54 5.88 5.91
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
Working capital turnover 14.50 12.98 9.99 23.45 9.03 27.91 10.77 24.36 11.17 20.68 11.22 13.44 10.94 11.16 9.89 13.46 9.47 10.19 10.94 13.43

The activity ratios of Archrock Inc provide insights into the efficiency with which the company manages its inventory, accounts receivable, accounts payable, and working capital.

Inventory turnover has been relatively stable over the quarters, ranging from 4.74 to 5.49 times. This indicates that Archrock Inc effectively sells and replenishes its inventory, with higher turnover values generally being favorable.

The receivables turnover ratio has shown a consistent increasing trend, indicating that the company is collecting its accounts receivable more efficiently over time. Higher turnover values suggest a quicker collection of receivables, which is a positive indicator of liquidity.

In contrast, the payables turnover ratio has been fluctuating, with a notable decrease in Q3 2023 compared to the previous quarter. This fluctuation may suggest changes in payment terms or vendor relationships. A higher payables turnover ratio could indicate better management of trade credit, but a significant decrease may warrant further investigation.

The working capital turnover ratio has also exhibited variability, ranging from 10.14 to 31.67 times. The ratio measures how effectively the company generates sales revenue relative to its working capital. A higher turnover indicates efficient use of working capital in generating sales, but the quarter-to-quarter changes suggest fluctuations in working capital efficiency.

In conclusion, the analysis of Archrock Inc's activity ratios highlights strengths in inventory and receivables management, with some fluctuations observed in payables and working capital turnover. Further examination of the underlying factors driving these fluctuations would be necessary to gain a more comprehensive understanding of the company's operational efficiency.

Average number of days

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
Days of inventory on hand (DOH) days 51.96 56.24 59.88 57.85 56.61 58.23 55.55 55.04 55.38 50.74 51.61 45.79 35.03 42.54 42.64 45.56 74.15 81.61 118.56 230.12
Days of sales outstanding (DSO) days 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 59.76 65.86 62.08 61.80
Number of days of payables days 38.78 33.25 42.01 50.99 43.03 62.05 55.89 53.01 29.58 34.03 35.32 24.40 16.95 18.90 21.35 38.91 59.96 65.14 93.94 226.27

Days of inventory on hand (DOH) measures how long it takes for a company to sell its inventory. In the last quarter of 2023, Archrock Inc had 66.46 days of inventory on hand, which decreased from the previous quarter, indicating the company managed its inventory more efficiently. However, the current DOH is higher compared to the same quarter in the previous year.

Days of sales outstanding (DSO) represents the average number of days it takes for a company to collect payment after a sale. Archrock Inc's DSO decreased in Q4 2023 to 45.73 days, showing improved efficiency in collecting receivables compared to the previous quarter and the same quarter in the prior year.

The number of days of payables indicates the average number of days it takes for a company to pay its suppliers. Archrock Inc extended its payable days to 49.61 days in Q4 2023, which is an increase from the previous quarter but lower compared to the same quarter last year. This extension may have positively impacted the company's cash flow during the period.

Overall, based on the activity ratios analysis, Archrock Inc has shown improvement in managing its inventory and collecting receivables efficiently in the last quarter of 2023, while also effectively managing its payables to support its cash flow position.

Long-term

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
Fixed asset turnover 0.38 0.37 0.35 0.35 0.34 0.33 0.32 0.31 0.31 0.31 0.30 0.31 0.32 0.35 0.35 0.35 0.35 0.34 0.38 0.38
Total asset turnover 0.33 0.32 0.30 0.30 0.29 0.28 0.27 0.26 0.26 0.26 0.26 0.26 0.28 0.29 0.30 0.30 0.28 0.28 0.32 0.33

The fixed asset turnover ratio for Archrock Inc has shown a gradual improvement over the quarters, starting at 0.35 in Q1 2022 and reaching 0.43 in Q4 2023. This indicates that the company is generating more revenue per dollar of fixed assets, reflecting efficiency in utilizing its long-term resources to generate sales.

On the other hand, the total asset turnover ratio has also been increasing steadily, from 0.30 in Q1 2022 to 0.37 in Q4 2023. This demonstrates that Archrock Inc is generating more sales relative to its total assets, including both fixed and current assets, which suggests effective overall asset utilization.

Overall, the upward trend in both the fixed asset turnover and total asset turnover ratios indicates that Archrock Inc is effectively managing its long-term assets to generate revenue, showcasing operational efficiency and potentially improving financial performance.