Archrock Inc (AROC)
Working capital turnover
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Revenue | US$ in thousands | 1,172,300 | 889,048 | 784,803 | 703,584 | 775,926 |
Total current assets | US$ in thousands | 233,122 | 213,157 | 231,960 | 186,570 | 182,011 |
Total current liabilities | US$ in thousands | 188,604 | 152,143 | 148,571 | 125,254 | 111,692 |
Working capital turnover | 26.33 | 14.57 | 9.41 | 11.47 | 11.03 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,172,300K ÷ ($233,122K – $188,604K)
= 26.33
The working capital turnover of Archrock Inc has shown a fluctuating trend over the past five years, starting at 11.03 in December 2020 and peaking at 26.33 in December 2024. The ratio measures how efficiently the company is utilizing its working capital to generate sales revenue. A higher working capital turnover indicates that the company is effectively managing its current assets and liabilities to support its operations.
The significant increase in the working capital turnover from 2022 to 2024 suggests that Archrock Inc has improved its efficiency in using its working capital to generate revenue. This may be attributed to better inventory management, more effective accounts receivable collection, or more stringent control over accounts payable.
It is important for the company to maintain a balance between liquidity and operational efficiency to ensure sustainable growth. Further analysis of the components of working capital and the underlying factors contributing to the fluctuation in the working capital turnover ratio would provide more insights into the financial health and operational effectiveness of Archrock Inc.
Peer comparison
Dec 31, 2024