Archrock Inc (AROC)

Activity ratios

Short-term

Turnover ratios

	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
Inventory turnover	6.90	7.13	7.39	7.19	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
Receivables turnover	8.62	6.96	8.43	8.75	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
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
Working capital turnover	25.66	20.73	13.71	22.77	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

The inventory turnover ratio for Archrock Inc has shown a gradual decline from 8.01 in March 2020 to 6.90 by December 2024. A decrease in the inventory turnover ratio could indicate inefficiencies in managing inventory levels or potential issues with demand forecasting.

On the other hand, the receivables turnover ratio has fluctuated over the period, with a significant increase from 5.46 in June 2022 to 8.62 by December 2024. This could suggest an improvement in collecting receivables or a change in the company's credit policies, potentially leading to better cash flow management.

In terms of payables turnover, the ratio has varied noticeably, peaking at 21.53 in December 2020 and decreasing to 10.75 by December 2024. A lower payables turnover ratio may indicate that the company is taking longer to pay its suppliers, which could have implications for its relationships with vendors.

The working capital turnover ratio has also shown fluctuations, with a high of 27.91 in September 2022 and a low of 9.03 in December 2022. A higher working capital turnover ratio implies that the company is generating more revenue from its working capital, which could indicate efficient use of resources.

Overall, the analysis of Archrock Inc's activity ratios suggests that there have been changes in the management of inventory, receivables, payables, and working capital over the period, which may impact the company's operational efficiency and financial performance.

Average number of days

		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
Days of inventory on hand (DOH)	days	52.89	51.18	49.41	50.76	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
Days of sales outstanding (DSO)	days	42.34	52.46	43.27	41.72	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
Number of days of payables	days	33.95	42.54	27.42	30.77	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

Based on the provided data, we can analyze the activity ratios of Archrock Inc as follows:

1. Days of Inventory on Hand (DOH):
- The company's days of inventory on hand have shown some fluctuations over the periods analyzed.
- The DOH increased from 45.56 days on March 31, 2020, to a peak of 59.88 days on June 30, 2023, before slightly decreasing to 52.89 days by December 31, 2024.
- This suggests that Archrock Inc may have faced challenges in managing its inventory efficiently, which is important for controlling costs and optimizing working capital.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding have varied significantly throughout the periods examined.
- DSO ranged from 41.72 days on March 31, 2024, to a high of 66.89 days on June 30, 2022.
- The company experienced a notable decrease in DSO towards the end of the data set, indicating an improvement in collecting receivables efficiently.

3. Number of Days of Payables:
- Archrock Inc's number of days of payables has also exhibited fluctuations over the analyzed periods.
- The days of payables ranged from 16.95 days on December 31, 2020, to a peak of 62.05 days on September 30, 2022.
- A higher number of days of payables may suggest that the company is taking longer to pay its suppliers, which could impact relationships with vendors.

In summary, the activity ratios of Archrock Inc indicate varying levels of efficiency in managing inventory, collecting receivables, and paying suppliers over the periods examined. Monitoring and improving these ratios are crucial for optimizing working capital management and overall operational performance.

Long-term

	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
Fixed asset turnover	0.34	0.32	0.41	0.40	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
Total asset turnover	0.30	0.27	0.36	0.35	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

The fixed asset turnover ratio for Archrock Inc has ranged between 0.30 to 0.41 over the past five years, indicating that the company generates between $0.30 to $0.41 in revenue for every dollar invested in fixed assets. The ratio seems to have stabilized around 0.34 to 0.38 in the most recent quarters, suggesting efficient utilization of fixed assets in generating revenue.

On the other hand, the total asset turnover ratio has fluctuated between 0.26 to 0.36 during the same period. This ratio indicates that Archrock Inc generates between $0.26 to $0.36 in revenue for every dollar invested in total assets. The ratio has shown an increasing trend in recent quarters, reaching 0.30 to 0.36, reflecting an improvement in the company's ability to generate revenue from its total assets.

Overall, the fixed asset turnover and total asset turnover ratios suggest that Archrock Inc is effectively utilizing its assets to generate revenue, with recent trends showing a positive momentum in asset turnover efficiency.