Baker Hughes Co (BKR)

Activity ratios

Short-term

Turnover 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
Inventory turnover 0.63 0.62 0.67 0.72 0.74 0.82 0.77 0.69 0.72 0.79 0.82 0.81 4.47 4.21 4.07 4.17 0.59 0.55 0.53 1.49
Receivables turnover 3.53 3.69 3.52 3.39 3.43 3.66 3.62 3.53 3.57 3.77 3.71 3.73 3.61 3.78 3.94 3.82 3.69 3.82 3.70 3.63
Payables turnover 0.72 0.75 0.80 0.81 0.79 0.88 0.83 0.76 0.76 0.93 0.96 0.98 5.59 5.41 5.18 4.74 0.63 0.67 0.65 1.85
Working capital turnover 7.54 6.89 6.47 5.66 5.82 4.20 4.18 3.64 3.40 3.63 3.51 3.37 3.26 4.68 4.50 5.20 4.54 4.34 4.14 3.91

Activity ratios provide insight into how efficiently a company is managing its assets and liabilities.

1. Inventory turnover: Baker Hughes Co's inventory turnover has been relatively stable around the range of 3.65 to 4.02 over the past eight quarters. This indicates that the company is managing its inventory efficiently, as it is able to sell and replace its inventory multiple times during the year.

2. Receivables turnover: The receivables turnover ratio has shown some fluctuations but generally hovers around the 3.50 to 3.78 range. This suggests that Baker Hughes Co collects its accounts receivables roughly every 3 to 4 quarters, reflecting its effectiveness in managing credit sales and collecting cash from customers.

3. Payables turnover: The payables turnover ratio has been consistently above 4, indicating that Baker Hughes Co is able to pay off its trade payables quickly. This may imply good relationships with suppliers and efficient management of cash flow.

4. Working capital turnover: Baker Hughes Co's working capital turnover has shown an increasing trend, reaching a peak of 7.71 in Q4 2023. This indicates that the company is generating revenue at a faster rate relative to its working capital, reflecting efficient utilization of resources to drive sales.

Overall, based on these activity ratios, Baker Hughes Co appears to be effectively managing its inventory, receivables, payables, and working capital to support its business operations and financial performance.

Average number of days

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
Days of inventory on hand (DOH) days 576.53 585.98 547.78 503.57 490.41 447.11 472.22 529.21 510.13 459.75 444.84 448.18 81.69 86.66 89.69 87.51 622.01 664.26 683.50 245.06
Days of sales outstanding (DSO) days 103.54 98.97 103.64 107.64 106.33 99.63 100.81 103.35 102.10 96.71 98.39 97.77 101.06 96.48 92.65 95.60 98.96 95.43 98.56 100.65
Number of days of payables days 506.02 486.71 459.04 448.54 459.51 413.29 438.65 478.72 480.13 393.08 379.47 371.75 65.26 67.52 70.49 77.03 576.12 542.45 563.92 197.12

Baker Hughes Co's activity ratios provide insight into the efficiency of the company's operations in managing inventory, collecting receivables, and paying its obligations.

- Days of Inventory on Hand (DOH) fluctuated between 91.80 days to 100.06 days over the past eight quarters, with Q2 2023 and Q1 2023 showing the highest inventory levels. This indicates that the company is holding inventory for relatively longer periods, which may suggest inefficiencies in inventory management.

- Days of Sales Outstanding (DSO) ranged from 96.61 days to 104.20 days during the same period. The company took longer, on average, to collect receivables in Q1 2023. A decreasing trend in DSO over time is preferable as it signifies faster collections and improved liquidity.

- The number of Days of Payables averaged between 77.42 days to 93.62 days, with Q4 2022 displaying the longest payment period. A higher number of days of payables may indicate the company's ability to delay payments to suppliers, potentially enhancing cash flow.

Overall, Baker Hughes Co's activity ratios suggest opportunities for improvement in managing inventory levels to optimize working capital, enhancing collections efficiency to shorten the receivables cycle, and evaluating payment terms to maintain strong supplier relationships while effectively managing cash flow.

Long-term

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
Fixed asset turnover 5.10 5.03 4.79 4.73 4.51 4.67 4.45 4.22 4.14 4.03 3.94 3.81 3.79 3.86 3.89 3.91 3.79 3.84 3.81 3.69
Total asset turnover 0.68 0.66 0.63 0.61 0.60 0.62 0.60 0.58 0.57 0.56 0.55 0.53 0.53 0.57 0.59 0.63 0.44 0.45 0.44 0.43

Long-term activity ratios provide insights into how efficiently a company is utilizing its assets to generate sales. In the case of Baker Hughes Co, the fixed asset turnover ratio has been steadily increasing over the past eight quarters, indicating that the company is generating more sales relative to its investment in fixed assets. This suggests that Baker Hughes Co is effectively utilizing its long-term assets to drive revenue growth.

Additionally, the total asset turnover ratio has also shown an upward trend over the same period, although at a slower pace compared to the fixed asset turnover ratio. This indicates that Baker Hughes Co is improving its overall efficiency in utilizing both fixed and current assets to generate sales.

Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios reflects positively on Baker Hughes Co's ability to efficiently manage its long-term assets and generate revenue. However, it is important to consider other factors such as industry benchmarks and competitor analysis to gain a comprehensive understanding of the company's long-term asset utilization efficiency.