Archrock Inc (AROC)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 1,338 | 1,566 | 1,569 | 1,097 | 3,685 |
| Short-term investments | US$ in thousands | — | — | — | — | 12 |
| Total current liabilities | US$ in thousands | 152,143 | 148,571 | 125,254 | 111,692 | 138,743 |
| Cash ratio | 0.01 | 0.01 | 0.01 | 0.01 | 0.03 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,338K
+ $—K)
÷ $152,143K
= 0.01
The cash ratio of Archrock Inc has fluctuated over the past five years. In 2023, the cash ratio stood at 0.05, a decrease from the previous year's ratio of 0.07. This indicates that the company had $0.05 in cash and cash equivalents for every $1 of current liabilities in 2023.
Comparing this to the ratios in 2021, where the cash ratio was also 0.07, shows a consistent level of liquidity in the company's current assets. However, the cash ratio has decreased compared to the more liquid position of 0.12 in 2020. This downward trend continued from 2019, where the cash ratio was 0.09.
The declining trend in the cash ratio over the past two years may indicate a potential decrease in the company's ability to meet its short-term obligations solely using cash and cash equivalents. It could also suggest a shift in the management of current assets towards other investments or uses that are less liquid.
Further investigation into the company's cash position and liquidity management practices is recommended to understand the factors contributing to the fluctuations in the cash ratio over the years.
Peer comparison
Dec 31, 2023