Archrock Inc (AROC)

Operating return on assets (Operating ROA)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Operating income (ttm)	US$ in thousands	332,974	294,140	261,709	222,518	195,069	168,800	143,455	136,743	121,660	106,608	108,764	94,155	113,685	110,613	136,039	34,167	-172,181	-125,747	-165,062	-77,281
Total assets	US$ in thousands	3,824,200	3,816,250	2,710,650	2,662,940	2,655,950	2,672,110	2,680,020	2,619,910	2,598,750	2,605,600	2,601,330	2,600,020	2,589,970	2,618,220	2,695,660	2,722,530	2,779,720	2,865,670	2,928,390	3,016,840
Operating ROA		8.71%	7.71%	9.65%	8.36%	7.34%	6.32%	5.35%	5.22%	4.68%	4.09%	4.18%	3.62%	4.39%	4.22%	5.05%	1.25%	-6.19%	-4.39%	-5.64%	-2.56%

December 31, 2024 calculation

Operating ROA = Operating income (ttm) ÷ Total assets
= $332,974K ÷ $3,824,200K
= 8.71%

Operating Return on Assets (ROA) is a critical financial ratio that indicates how efficiently a company generates profits from its assets used in its core operations. For Archrock Inc, the operating ROA has shown fluctuations over the past few years.

From March 31, 2020, to September 30, 2021, the operating ROA was negative, indicating that during this period, the company was not efficiently utilizing its assets to generate operating income. However, starting from March 31, 2021, the trend reversed, and the operating ROA turned positive.

The positive operating ROA trend continued to improve gradually, reaching its peak at 8.36% on March 31, 2024. This indicates that the company was able to increase its operating income in relation to its asset base, showcasing improved operational efficiency and profitability.

While there was a slight dip in the operating ROA in the subsequent quarters, it remained relatively strong, staying above 7% as of December 31, 2024. This suggests that Archrock Inc has maintained a solid performance in utilizing its assets effectively to generate operating profits.

Overall, the trend in Archrock Inc's operating ROA reflects a positive turnaround from negative levels to consistently positive figures, indicating improved operational efficiency and profitability over the analyzed period.