Archrock Inc (AROC)
Cash conversion cycle
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 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 | 74.15 | 81.61 | 118.56 | 230.12 |
| Days of sales outstanding (DSO) | days | 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 | 59.76 | 65.86 | 62.08 | 61.80 |
| Number of days of payables | days | 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 | 59.96 | 65.14 | 93.94 | 226.27 |
| Cash conversion cycle | days | 64.37 | 78.51 | 72.02 | 58.41 | 80.24 | 60.34 | 66.56 | 63.49 | 81.71 | 74.47 | 71.83 | 75.90 | 67.64 | 72.94 | 73.07 | 63.09 | 73.95 | 82.32 | 86.70 | 65.65 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 51.96 + 51.19 – 38.78
= 64.37
The cash conversion cycle for Archrock Inc has fluctuated over the past eight quarters, ranging from a low of 51.54 days in Q3 2022 to a high of 79.15 days in Q3 2023. This cycle represents the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
A shorter cash conversion cycle generally indicates that the company is efficient in managing its working capital and turning inventory into sales quickly. On the other hand, a longer cycle may suggest that the company is facing challenges in converting its investments into cash.
Archrock Inc's cash conversion cycle has shown some variability, with periods of both shorter and longer cycles. It is crucial for the company to monitor and manage its working capital effectively to ensure a healthy and sustainable cash conversion cycle.
Peer comparison
Dec 31, 2023