Baker Hughes Co (BKR)

Operating return on assets (Operating ROA)

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Operating income US$ in thousands 3,081,000 2,317,000 1,185,000 1,310,000 -15,978,000
Total assets US$ in thousands 38,363,000 36,945,000 34,181,000 35,308,000 38,007,000
Operating ROA 8.03% 6.27% 3.47% 3.71% -42.04%

December 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $3,081,000K ÷ $38,363,000K
= 8.03%

Operating ROA is a key financial ratio used to assess a company's efficiency in generating profit from its assets. Baker Hughes Co's operating ROA has shown significant improvement over the last five years.

In December 2020, the company had a negative operating ROA of -42.04%, indicating that it was not effectively utilizing its assets to generate operating income. However, by December 2021, there was a notable turnaround as the operating ROA improved to 3.71%, indicating that the company was beginning to generate a positive return on its assets.

This positive trend continued in the following years, with operating ROA further increasing to 3.47% in December 2022, 6.27% in December 2023, and 8.03% in December 2024. The steady improvement in operating ROA suggests that Baker Hughes Co has been more efficient in utilizing its assets to generate operating income, leading to a healthier financial performance.

Overall, the increasing trend in operating ROA reflects positively on Baker Hughes Co's ability to generate profits from its assets, signaling improved operational efficiency and financial health over the analyzed period.