Baker Hughes

Key Performance Metrics

  • The review of Net Profit Margin witnessed a falling trend and then a rise in 2023. The Net profit margin increased from 14% in 2019 to 7.72% in 2023.
  • The EBIT Margin for the period under analysis was -9.03%, with 2020 and 2023 performing the worst and best,
  • In the current year, Baker Hughes was able to cover its interest liabilities 73 times in the current year compared to 2019 when it could cover its interest liabilities only 4.53 times.
  • The Capex to Sales stood at22 in 2021 from 0.23 in 2019, implying a low performance of the business in relation to revenue.

Profitability

  • The revenue of Baker Hughes has decreased over the years, although there was a sharp increase in 2023. The revenue decreased by 98% between 2020 and 2021. There occurred an increase of 20.56% between 2022 and 2023 (the current period).
  • Baker Hughes’s performance in profitability looks good as the return on equity also recorded good performance during the period of analysis.

Liquidity

  • The company’s result in liquidity looks good, although the current ratio decreased from 1.52:1 in 2019 to 1.25:1 in the last year. This still implies that the company has enough assets to settle its current liabilities.
  • Receivables days improved over the 5-year period as it took an average of 99 days to recover money owed by customers.
  • Working capital steadily decrease between 2019 and 2021, but increased in 2022 and 2023.

Capital Structure

  • Baker Hughes is both equity and debt financed.
  • The debt-to-equity (D/E) ratio has been rising year on year. The gearing position of the company appears to be high as it stood at 1.38 in the current year.

 

Source: Baker Hughes Annual Report

 

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