Baker Hughes

Key Performance Metrics

  • The review of Net Profit Margin witnessed a falling trend. The Net loss margin decreased from 2.28% in 2017 to 1.61% in 2021.
  • The EBIT Margin for the period under analysis was 6.39%, with 2020 and 2021 performing the worst and best, respectively.
  • In the current year, Baker Hughes was able to cover its interest liabilities 4.38 times in the current year compared to 2017 when it couldn’t cover its interest liabilities.
  • The Capex to Sales stood at 0.33 in 2021 from 1.68 in 2017, implying a low performance of the business in relation to revenue.

Profitability

  • The revenue of Baker Hughes has increased over the years. The revenue increased by 19.34% between 2017 and 2021. There occurred a decrease of 0.98% between 2020 and 2021 (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, as current ratio increased from 1.61:1 to 1.65:1 on the last year. Which implies that the company have enough assets to settle its current liabilities.
  • Receivables days improved over the 5-year period as it took an average of 100 days to recover money owed by customers.
  • Working capital steadily decrease between 2017 and 2021, falling by 17.63% with a YoY fall of 9.61%.

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 1.11 in the current year.

 

Source: Baker Hughes Annual Report

 

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