Archrock Inc (AROC)
Solvency 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.60 | 0.60 | 0.61 | 0.59 | 0.60 | 0.58 | 0.59 | 0.58 | 0.59 | 0.00 | 0.00 | 0.00 | 0.61 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.65 | 0.65 | 0.66 | 0.64 | 0.64 | 0.63 | 0.64 | 0.63 | 0.63 | 0.00 | 0.00 | 0.00 | 0.64 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 1.82 | 1.86 | 1.92 | 1.81 | 1.80 | 1.72 | 1.75 | 1.74 | 1.72 | 0.00 | 0.00 | 0.00 | 1.81 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 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 | 2.86 | 2.93 | 3.20 | 3.13 |
The solvency ratios of Archrock Inc over the last eight quarters provide insight into the company's ability to meet its long-term financial obligations.
The Debt-to-Assets ratio has remained relatively stable around 0.60, indicating that approximately 60% of the company's assets are financed by debt. This suggests a balanced capital structure where the company relies moderately on debt financing to support its operations and growth.
The Debt-to-Capital ratio has also shown consistency around 0.65, highlighting that debt accounts for approximately 65% of the company's total capital structure. This ratio affirms a steady mix of debt and equity in the company's funding, reflecting a measured approach to leveraging.
The Debt-to-Equity ratio has shown some fluctuation but generally hovers around 1.80, suggesting that Archrock Inc is using leverage to finance its operations. As the ratio surpasses 1, it indicates that the company has more debt than equity in its capital structure, which may pose higher financial risk.
The Financial Leverage ratio has shown a slight upward trend, indicating an increase in the company's reliance on debt to support its operations over the quarters. The ratio exceeding 3 signifies that a significant portion of Archrock Inc's assets are financed by debt, signaling a higher degree of financial leverage.
Overall, while the company maintains a stable debt-to-assets and debt-to-capital ratios, the increasing debt-to-equity ratio and financial leverage ratio may indicate higher financial risk as Archrock Inc continues to rely more on debt financing. It is essential for stakeholders to monitor these solvency ratios to assess the company's long-term financial health and risk profile.
Coverage 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 2.28 | 2.02 | 1.83 | 1.79 | 1.60 | 1.53 | 1.46 | 1.30 | 1.36 | 1.37 | 1.47 | 1.02 | 0.19 | 0.22 | 0.21 | 0.67 | 1.56 | 1.68 | 1.62 | 1.51 |
Interest coverage is a key financial ratio that indicates a company's ability to meet its interest obligations using its operating income. A higher interest coverage ratio suggests that a company is more capable of servicing its debt.
Analyzing Archrock Inc's interest coverage for the past few quarters reveals a positive trend. The interest coverage ratio has consistently improved from 1.29 in Q1 2022 to 2.32 in Q4 2023. This indicates that the company's operating income has been sufficient to cover its interest expenses, with a notable increase in coverage over the period.
The gradual improvement in interest coverage suggests that Archrock Inc's financial position has strengthened, enhancing its ability to manage debt and meet interest payments. However, it is essential to monitor this ratio over time to ensure that the trend continues positively and to assess the company's overall financial health.