Archrock Inc (AROC)
Working capital 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 884,635 | 850,029 | 813,492 | 785,951 | 753,160 | 724,464 | 705,631 | 683,916 | 685,067 | 688,377 | 699,129 | 720,039 | 768,969 | 841,112 | 878,250 | 896,466 | 884,844 | 872,016 | 863,322 | 858,072 |
| Total current assets | US$ in thousands | 213,157 | 224,877 | 223,568 | 210,623 | 231,960 | 220,284 | 217,035 | 196,384 | 186,570 | 186,706 | 187,855 | 188,310 | 182,011 | 211,700 | 208,889 | 223,744 | 232,203 | 253,142 | 231,511 | 228,672 |
| Total current liabilities | US$ in thousands | 152,143 | 159,375 | 142,097 | 177,101 | 148,571 | 194,330 | 151,529 | 168,310 | 125,254 | 153,423 | 125,550 | 134,733 | 111,692 | 136,324 | 120,079 | 157,145 | 138,743 | 167,568 | 152,580 | 164,790 |
| 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 |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $884,635K ÷ ($213,157K – $152,143K)
= 14.50
Working capital turnover is a financial ratio that measures how efficiently a company is using its working capital to generate sales revenue. A higher working capital turnover ratio indicates that the company is effectively managing its working capital to support its sales operations.
In the case of Archrock Inc, the working capital turnover ratio has fluctuated over the past eight quarters. In Q4 2023, the ratio was 16.23, which was higher than the previous quarter but lower than the Q1 2023 ratio of 26.20. This suggests that the efficiency of utilizing working capital to generate sales revenue improved in Q4 2023 compared to the previous quarter.
Overall, Archrock Inc has shown varying levels of efficiency in utilizing its working capital over the past two years, with some quarters demonstrating higher turnover ratios (e.g., Q3 2022 at 31.67) indicating better efficiency, and others showing lower ratios (e.g., Q4 2022 at 10.14) suggesting less effective management of working capital.
It would be important for Archrock Inc to monitor and analyze the factors influencing these fluctuations in the working capital turnover ratio to ensure optimal utilization of working capital resources and drive sustainable revenue generation in the long term.
Peer comparison
Dec 31, 2023