Archrock Inc (AROC)

Financial leverage ratio

		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
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
Total stockholders’ equity	US$ in thousands	1,323,530	1,290,740	894,496	882,080	871,021	861,093	855,533	853,050	860,693	869,816	873,918	872,323	891,438	904,047	913,821	923,124	935,557	949,685	950,873	999,472
Financial leverage ratio		2.89	2.96	3.03	3.02	3.05	3.10	3.13	3.07	3.02	3.00	2.98	2.98	2.91	2.90	2.95	2.95	2.97	3.02	3.08	3.02

December 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,824,200K ÷ $1,323,530K
= 2.89

The financial leverage ratio of Archrock Inc has shown fluctuations over the past few years. From March 31, 2020, to December 31, 2024, the ratio ranged between 2.89 and 3.13. This indicates that the company's reliance on debt to finance its operations and growth varied during this period.

Overall, the trend in the financial leverage ratio shows that the company was initially increasing its leverage, reaching a peak in June 30, 2023 but has since slightly decreased. A higher financial leverage ratio indicates a higher level of financial risk as the company has more debt in its capital structure. Conversely, a lower ratio implies a lower level of financial risk as there is less debt in the company's capital structure.

Archrock Inc's financial leverage ratio of around 2.98 to 3.13 in the most recent periods suggests that the company maintains a moderate level of leverage in its capital structure, balancing the benefits and risks associated with debt financing. However, close monitoring of this ratio is important to ensure the company's financial stability and ability to meet its debt obligations in the long run.