Baker Hughes Co (BKR)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 88.79% | 87.26% | 83.16% | 85.80% | 0.65% |
| Operating profit margin | 11.15% | 9.15% | 5.79% | 6.48% | -79.54% |
| Pretax margin | 11.71% | 10.38% | -0.00% | 2.67% | -46.70% |
| Net profit margin | 10.78% | 7.67% | -2.94% | -1.08% | -49.48% |
Baker Hughes Co has shown a significant improvement in its profitability ratios over the years.
- Gross profit margin has increased from a low of 0.65% in 2020 to a high of 88.79% in 2024, indicating the company's ability to efficiently manage production costs and generate higher profits from its sales.
- Operating profit margin has also improved, moving from a negative margin of -79.54% in 2020 to a positive margin of 11.15% in 2024. This suggests that the company has been able to control its operating expenses and increase operating efficiency.
- Pretax margin has shown a positive trend as well, starting at -46.70% in 2020 and steadily rising to 11.71% in 2024. This indicates the company's ability to generate profits before tax expenses.
- Net profit margin, which reflects the company's bottom line profitability, has also seen a positive evolution. From a negative margin of -49.48% in 2020, it has improved to 10.78% in 2024, showing that Baker Hughes Co has been able to increase its net profits relative to its total revenue.
Overall, the trend in profitability ratios for Baker Hughes Co demonstrates the company's success in enhancing its operational efficiency and financial performance over the years.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.03% | 6.27% | 3.47% | 3.71% | -42.04% |
| Return on assets (ROA) | 7.77% | 5.26% | -1.76% | -0.62% | -26.15% |
| Return on total capital | 18.24% | 15.08% | 8.23% | 8.83% | -123.93% |
| Return on equity (ROE) | 17.63% | 12.64% | -4.18% | -1.48% | -77.10% |
Baker Hughes Co's profitability ratios have shown a significant improvement over the years.
1. Operating Return on Assets (Operating ROA):
- In 2020, the Operating ROA was negative at -42.04%, indicating that the company generated a loss from its core operations relative to its total assets.
- However, by 2021, the Operating ROA improved to 3.71%, signaling a positive return from operating activities.
- The trend continued with slight fluctuations in 2022 and 2023, with Operating ROA at 3.47% and 6.27%, respectively.
- By 2024, Baker Hughes Co's Operating ROA notably increased to 8.03%, reflecting enhanced operational efficiency and profitability.
2. Return on Assets (ROA):
- The ROA was negative in 2020 at -26.15%, suggesting the company had a net loss relative to its total assets.
- Subsequently, there was an improvement as the ROA turned positive in 2023 and 2024, recording values of 5.26% and 7.77%, respectively.
- This indicates that Baker Hughes Co became more effective in generating earnings from its assets in these years.
3. Return on Total Capital:
- Baker Hughes Co's Return on Total Capital was negative in 2020, massively at -123.93%.
- However, the company showed a robust recovery and improvement in 2021, with a Return on Total Capital of 8.83%.
- The trend continued positively in the following years, reaching 18.24% in 2024, highlighting the efficient use of total capital to generate returns.
4. Return on Equity (ROE):
- Initially negative in 2020 at -77.10%, the ROE demonstrated a similar upward trajectory to the other profitability ratios.
- By 2024, the ROE stood at 17.63%, indicating that Baker Hughes Co provided an impressive return to its shareholders relative to their equity investments.
Overall, Baker Hughes Co's profitability ratios depict a remarkable turnaround and growth in profitability from 2020 to 2024, reflecting improved operational performance and efficient utilization of assets and capital.