Archrock Inc (AROC)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 52.89 | 51.96 | 56.61 | 55.38 | 38.34 |
| Days of sales outstanding (DSO) | days | 41.25 | 50.94 | 63.97 | 54.44 | 49.12 |
| Number of days of payables | days | 33.95 | 38.78 | 43.03 | 29.58 | 18.56 |
| Cash conversion cycle | days | 60.19 | 64.11 | 77.55 | 80.24 | 68.90 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 52.89 + 41.25 – 33.95
= 60.19
The cash conversion cycle of Archrock Inc has shown fluctuations over the past five years.
As of December 31, 2020, the cash conversion cycle stood at 68.90 days, indicating that the company takes approximately 69 days to convert its investments in inventory and accounts receivable into cash flow from sales.
By December 31, 2021, the cycle increased to 80.24 days, suggesting a lengthening period for Archrock Inc to convert its resources into cash.
In the subsequent years, the cycle improved slightly, reaching 77.55 days by December 31, 2022, followed by a decrease to 64.11 days by December 31, 2023.
The most recent data point, as of December 31, 2024, shows a further reduction in the cash conversion cycle to 60.19 days, indicating a more efficient process in converting investments into cash.
Overall, while the cash conversion cycle has shown variability, the trend in recent years suggests that Archrock Inc has managed to improve its efficiency in converting its resources into cash flow.
Peer comparison
Dec 31, 2024