Archrock Inc (AROC)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.40 | 1.41 | 1.57 | 1.19 | 1.56 | 1.13 | 1.43 | 1.17 | 1.49 | 1.22 | 1.50 | 1.40 | 1.63 | 1.55 | 1.74 | 1.42 | 1.67 | 1.51 | 1.52 | 1.39 |
| Quick ratio | 0.82 | 0.81 | 0.86 | 0.64 | 0.94 | 0.67 | 0.87 | 0.69 | 0.85 | 0.73 | 0.87 | 0.81 | 0.94 | 0.84 | 1.06 | 0.90 | 1.07 | 0.96 | 0.98 | 0.89 |
| Cash ratio | 0.01 | 0.00 | 0.01 | 0.02 | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | 0.02 | 0.03 | 0.01 | 0.01 | 0.01 | 0.02 | 0.02 | 0.03 | 0.02 | 0.01 | 0.01 |
Archrock Inc's liquidity ratios provide insight into the company's ability to meet its short-term financial obligations.
The current ratio has shown fluctuations over the past eight quarters, ranging from 1.19 to 1.57. Despite the variability, the ratio generally indicates that Archrock Inc has sufficient current assets to cover its current liabilities. However, the current ratio has dipped below 1 in Q1 2023, suggesting a potential liquidity strain during that period.
The quick ratio, which excludes inventory from current assets, has also varied, ranging from 0.68 to 0.99. This ratio reveals a lower level of liquidity compared to the current ratio, indicating that Archrock Inc may have more difficulty meeting its short-term obligations without relying on inventory in certain quarters.
The cash ratio, which measures the most liquid assets relative to current liabilities, has mostly remained stable between 0.05 and 0.07. This ratio suggests that Archrock Inc may have limited cash on hand relative to its current liabilities, potentially requiring the company to liquidate other current assets to meet short-term obligations.
Overall, while Archrock Inc generally maintains adequate liquidity levels based on its current ratio, the fluctuations and relatively lower quick and cash ratios indicate that the company may need to manage its short-term cash flow more effectively to ensure continued financial stability.
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
The cash conversion cycle of Archrock Inc has fluctuated over the past eight quarters, indicating varying efficiency in managing its operating cycle. In Q3 2023, the company experienced a longer cash conversion cycle of 79.15 days, which could suggest delays in converting investments in inventory and receivables into cash. Conversely, in Q1 2023, the cash conversion cycle decreased to 54.96 days, reflecting improved cash flow efficiency during that period.
The trend shows that there were peaks in Q3 2023 and Q4 2022, which implies potential issues with managing working capital during those quarters. On the other hand, the company performed relatively well in managing its cash conversion cycle in Q2 2022 with a lower value of 58.30 days. Overall, fluctuations in the cash conversion cycle highlight the importance of monitoring working capital closely to ensure optimal efficiency in cash management for Archrock Inc.