Archrock Inc (AROC)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 889,048 | 784,803 | 703,584 | 775,926 | 873,167 |
| Receivables | US$ in thousands | 124,069 | 137,544 | 104,931 | 104,425 | 144,865 |
| Receivables turnover | 7.17 | 5.71 | 6.71 | 7.43 | 6.03 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $889,048K ÷ $124,069K
= 7.17
The receivables turnover ratio for Archrock Inc has fluctuated over the past five years. The ratio indicates how efficiently the company is collecting cash from its credit sales. A higher turnover ratio typically suggests more effective management of accounts receivable.
In 2023, the receivables turnover ratio increased to 7.98 from 6.15 in 2022, indicating a significant improvement in the company's collection efficiency. This suggests that Archrock Inc was able to convert its accounts receivable into cash almost 8 times during the year, compared to about 6 times in the previous year.
The ratio was relatively high in 2020 and 2021, at 8.38 and 7.45, which also indicated strong collection efficiency during those years. However, the ratio dropped slightly to 6.66 in 2019, suggesting a potential decrease in the efficiency of collecting cash from credit sales during that year.
Overall, the trend in Archrock Inc's receivables turnover ratio indicates fluctuations in the company's ability to efficiently collect cash from its customers over the past five years, with 2023 showing a notable improvement in this aspect.
Peer comparison
Dec 31, 2023