Baker Hughes Co (BKR)

Operating return on assets (Operating ROA)

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
Operating income (ttm) US$ in thousands 3,081,000 3,067,000 2,851,000 2,532,000 2,317,000 2,329,000 1,884,000 1,345,000 1,186,000 1,097,000 1,206,000 1,425,000 1,310,000 918,000 491,000 245,000 -15,978,000 -15,830,000 -15,484,000 -15,161,000
Total assets US$ in thousands 38,363,000 37,530,000 36,656,000 37,141,000 36,945,000 36,550,000 36,093,000 35,042,000 34,181,000 33,165,000 33,753,000 34,994,000 35,308,000 35,772,000 36,669,000 36,836,000 38,007,000 37,339,000 37,523,000 37,229,000
Operating ROA 8.03% 8.17% 7.78% 6.82% 6.27% 6.37% 5.22% 3.84% 3.47% 3.31% 3.57% 4.07% 3.71% 2.57% 1.34% 0.67% -42.04% -42.40% -41.27% -40.72%

December 31, 2024 calculation

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

Operating return on assets (ROA) is a key financial metric that reflects a company's efficiency in generating profits from its operating activities relative to its total assets.

For Baker Hughes Co, the operating ROA has shown a significant improvement over the years based on the data provided. The company's operating ROA was in negative territory in the fiscal year 2020, indicating operational inefficiencies leading to losses relative to its asset base. However, starting from the first quarter of 2021, Baker Hughes Co began to see a positive trend in its operating ROA.

The operating ROA increased steadily from 0.67% in March 2021 to 8.03% in December 2024. This upward trajectory suggests that Baker Hughes Co has been effectively utilizing its assets to generate operating income and improve profitability. The company's management may have implemented strategic measures to enhance operational efficiency, streamline costs, and optimize asset utilization.

Overall, the improving trend in Baker Hughes Co's operating ROA indicates positive financial performance and operational effectiveness in recent years, ultimately benefiting the company and its shareholders. It signals better profitability and asset utilization, which are crucial factors in assessing a company's financial health and performance.