F

Archrock, Inc. — Earnings Quality Grade F

AROC · Energy

Major red flags

Revenue
$1.5B
2025
Net Income
$322M
2025
Gross Margin
48.6%
Free Cash Flow
$120M
01

Screening Summary

13
Passed
2
Watch
2
Failed
-2.6
M-Score

Management Signals

No recent CEO, CFO, board, or accounting leadership signals found in SEC 8-K filings.
02

Financial Trends

Revenue & Net Income ($B)

Margins (%)

03

18-Point Screening

01

Revenue Quality

A1DSO Change

DSO 35 days, change -7 days YoY

A2AR vs Revenue Growth

AR growth 7.4% vs revenue growth 28.7%

A3Revenue vs CFFO

Revenue 28.7%, CFFO 44.8%. Cash follows revenue

02

Expense Quality

B1Inventory vs COGS

Inventory 22.4% vs COGS 17.6%. Normal

B2CapEx vs Revenue

CapEx growth 39.9% vs revenue 28.7%. Normal

B3SG&A Ratio

SG&A/Gross Profit = 20.4%, excellent (<30%)

B4Gross Margin

Gross margin 48.6%, change +4.9pp. Stable

03

Cash Flow Quality

C1CFFO vs Net Income

CFFO/NI = 1.93. Profits backed by cash

C2Free Cash Flow

FCF < 50% of Net Income for 3 years

C3Accruals Ratio

Accruals ratio = -6.9%. Low accruals

C4Cash vs Debt

Cash $0.0B covers only 0% of debt $2.4B

04

Balance Sheet Health

D1Goodwill + Intangibles

Goodwill+Intangibles $0.3B = 18% of equity. Manageable

D2Leverage

Debt/EBITDA = 2.8x. Healthy

D3Soft Asset Growth

Other assets 4.3% vs revenue 28.7%. Normal

D4Asset Impairment

No write-off data

05

Acquisition Risk

!
E1Serial Acquirer FCF

FCF after acquisitions negative for 2/3 years

!
E2Goodwill Surge

Goodwill+Intangibles surged 79% YoY

06

Manipulation Score

F1Beneish M-Score

M-Score = -2.60 (< -2.22). Unlikely manipulator

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04

Beneish M-Score

Manipulation Probability-2.6
-4.0 Clean-2.22 Grey-1.78 Danger0
0.835
DSRI
AR growing faster than revenue?
0.9
GMI
Gross margin declining?
1.304
AQI
Asset quality deteriorating?
1.287
SGI
Revenue growth rate
0.838
DEPI
Depreciation slowing?
0.826
SGAI
SG&A ratio changing?
-0.0689
TATA
Accruals level
0.961
LVGI
Leverage increasing?
05

Altman Z-Score

-0.07
Distress Zone
0 Distress1.102.605.0+ Safe
0.0246
Liquidity
-0.519
Cumulative profit
0.1354
Operating efficiency
0.5219
Leverage

Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-25