Archrock (Archrock) Interest Coverage

: 2.56 (As of Dec. 2023)

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Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. Archrock's Operating Income for the three months ended in Dec. 2023 was $71.6 Mil. Archrock's Interest Expense for the three months ended in Dec. 2023 was $-27.9 Mil. Archrock's interest coverage for the quarter that ended in Dec. 2023 was 2.56. The higher the ratio, the stronger the company's financial strength is.

Warning Sign:

Ben Graham prefers companies' interest coverage to be at least 5. Archrock Inc interest coverage is 2.32, which is low.

The historical rank and industry rank for Archrock's Interest Coverage or its related term are showing as below:

AROC' s Interest Coverage Range Over the Past 10 Years
Min: 0.85 Med: 1.38 Max: 2.32
Current: 2.32

AROC's Interest Coverage is ranked worse than
80.08% of 763 companies
in the Oil & Gas industry
Industry Median: 6.67 vs AROC: 2.32

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Archrock Interest Coverage Historical Data

The historical data trend for Archrock's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

* Premium members only.

Archrock Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

1.94

1.89

1.26

1.43

2.32

Archrock Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Interest Coverage																1.48	1.87	2.32	2.49	2.56

Competitive Comparison

For the Oil & Gas Equipment & Services subindustry, Archrock's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Archrock Interest Coverage Distribution

For the Oil & Gas industry and Energy sector, Archrock's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Archrock's Interest Coverage falls into.

Archrock Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Archrock's Interest Coverage for the fiscal year that ended in Dec. 2023 is calculated as

Here, for the fiscal year that ended in Dec. 2023, Archrock's Interest Expense was $-111.5 Mil. Its Operating Income was $258.4 Mil. And its Long-Term Debt & Capital Lease Obligation was $1,597.1 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	258.438	/	-111.488
	=	2.32

Archrock's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the three months ended in Dec. 2023, Archrock's Interest Expense was $-27.9 Mil. Its Operating Income was $71.6 Mil. And its Long-Term Debt & Capital Lease Obligation was $1,597.1 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	71.599	/	-27.938
	=	2.56

The higher the ratio, the stronger the company's Financial Strength is.

Archrock (NYSE:AROC) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

Archrock Interest Coverage Related Terms

Thank you for viewing the detailed overview of Archrock's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

Archrock (Archrock) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Energy » Oil & Gas » Archrock Inc (NYSE:AROC) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

54E:Germany 54E:Germany

Address

9807 Katy Freeway, Suite 100, Houston, TX, USA, 77024

Website

https://www.archrock.com

Archrock Inc is an energy infrastructure company with focus on midstream natural gas compression and a commitment to helping customers produce, compress and transport natural gas. It has two business segments, Contract Operations, and Aftermarket Services. Under the umbrella of contract operations services, the company provides operations to meet customers' natural gas compression needs. Services include designing, owning, installing, operating, and maintaining equipment. Aftermarket Services business provides a full range of services to support the compression needs of customers that own compression equipment, including operations, maintenance, overhaul and reconfiguration services and sales of parts and components. It generates maximum revenue from the Contract Operations segment.

Executives

Donna A Henderson	officer: VP, Chief Accounting Officer	1700 PACIFIC AVENUE, SUITE 2900, DALLAS TX 75201
Jdh Capital Holdings, L.p.	10 percent owner	1111 TRAVIS STREET, SUITE 2300, HOUSTON TX 77002
Eric W Thode	officer: Vice President	9807 KATY FREEWAY, SUITE 100, HOUSTON TX 77024
Hildebrand Enterprises Co	10 percent owner	1111 TRAVIS STREET, SUITE 2300, HOUSTON TX 77002
Hildebrand Enterprises, Lp	10 percent owner	1111 TRAVIS STREET, SUITE 2300, HOUSTON TX 77002
Jdh Capital Co	10 percent owner	C/O HILCORP ENERGY COMPANY, 1111 TRAVIS, HOUSTON TX 77002
Jeffery D Hildebrand	10 percent owner	1111 TRAVIS STREET, SUITE 2300, HOUSTON TX 77002
Melinda B Hildebrand	10 percent owner	1111 TRAVIS STREET, SUITE 2300, HOUSTON TX 77002
Leonard Wayne Mallett	director	P.O. BOX 2521, HOUSTON TX 77252-2521
Jason C Rebrook	director	C/O JDH CAPITAL COMPANY, 1111 TRAVIS STREET, HOUSTON TX 77002
Doug S Aron	officer: Sr Vice President and CFO	10000 MEMORIAL DRIVE, SUITE 600, HOUSTON TX 77024-3411
Gordon T Hall	director	3300 NORTH SAM HOUSTON PARKWAY EAST, HOUSTON TX 77032-3411
D Bradley Childers	officer: Sr Vice President	DC/O UNIVERSAL COPRESSION HOLDINGS INC, 4440 BRITTMOORE ROAD, HOUSTON TX 77041
Jason Ingersoll	officer: Vice President	16666 NORTHCHASE DRIVE, HOUSTON TX 77060
Sean K Clawges	officer: Vice President	9807 KATY FREEWAY, SUITE 100, HOUSTON TX 77024