Baker Hughes Co (BKR)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Current ratio 1.32 1.30 1.27 1.25 1.25 1.27 1.28 1.32 1.32 1.51 1.51 1.61 1.65 1.59 1.58 1.59 1.61 1.43 1.47 1.44
Quick ratio 0.91 0.84 0.82 0.80 0.82 0.85 0.83 0.80 0.78 0.92 0.93 1.02 1.09 0.96 0.94 0.98 1.03 0.84 0.85 0.80
Cash ratio 0.36 0.30 0.26 0.28 0.28 0.34 0.31 0.25 0.24 0.33 0.34 0.40 0.47 0.39 0.39 0.45 0.48 0.31 0.31 0.20

Baker Hughes Co's liquidity ratios show a stable trend over the years. The current ratio has been consistently above 1, indicating that the company has been able to meet its short-term obligations. However, there was a slight decline in the current ratio from 1.65 as of December 31, 2021, to 1.32 as of December 31, 2024.

The quick ratio, which measures the company's ability to meet its immediate liquidity needs, also demonstrates a consistent performance, with values generally above 0.8. The ratio increased from 0.91 as of December 31, 2024, showing improved short-term liquidity position.

Furthermore, the cash ratio, which provides the most stringent measure of liquidity by considering only the most liquid assets, has generally remained above 0.2. Although there was some fluctuation, the ratio stayed within a reasonable range, indicating that Baker Hughes Co has a sufficient level of cash to cover its immediate liabilities.

Overall, Baker Hughes Co's liquidity ratios suggest that the company has maintained a satisfactory level of liquidity to meet its short-term financial obligations, with no significant liquidity issues observed during the period under review.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cash conversion cycle days 142.62 195.73 155.49 184.51 174.05 198.25 192.38 162.67 137.23 133.46 134.37 153.83 132.10 163.38 163.77 174.20 117.48 115.62 111.85 106.08

The cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory and other resources into cash from sales, provides insights into the efficiency of Baker Hughes Co's working capital management.

Analyzing the data provided, we observe fluctuations in Baker Hughes Co's cash conversion cycle over the period from March 31, 2020, to December 31, 2024. The company's cash conversion cycle ranged from a low of 106.08 days on March 31, 2020, to a high of 198.25 days on September 30, 2023.

The trend in the cash conversion cycle fluctuates over the period but shows a general pattern of variability. In the initial period, the cycle remained relatively stable, but from March 31, 2021, to December 31, 2024, we observed significant fluctuations, indicating potential challenges in managing working capital efficiently.

It is essential for Baker Hughes Co to monitor and manage its cash conversion cycle effectively to ensure operational efficiency and financial stability. An increasing cash conversion cycle may imply inefficiencies in inventory management, collection of receivables, or payment of payables, which can impact the company's liquidity and profitability.

Overall, a detailed analysis of the cash conversion cycle can provide valuable insights into Baker Hughes Co's working capital management practices and operational efficiency, highlighting areas that require attention to optimize cash flow and enhance overall financial performance.