Baker Hughes Co (BKR)
Return on total capital
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (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 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 16,895,000 | 16,189,000 | 15,574,000 | 15,391,000 | 15,368,000 | 15,250,000 | 15,125,000 | 14,714,000 | 14,394,000 | 14,144,000 | 14,882,000 | 15,704,000 | 14,830,000 | 14,142,000 | 13,890,000 | 13,043,000 | 12,893,000 | 11,582,000 | 11,254,000 | 11,470,000 |
| Return on total capital | 18.24% | 18.94% | 18.31% | 16.45% | 15.08% | 15.27% | 12.46% | 9.14% | 8.24% | 7.76% | 8.10% | 9.07% | 8.83% | 6.49% | 3.53% | 1.88% | -123.93% | -136.68% | -137.59% | -132.18% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $3,081,000K ÷ ($—K + $16,895,000K)
= 18.24%
Baker Hughes Co's return on total capital has shown a significant improvement over the past quarters, starting in negative territory in early 2020 and gradually increasing to reach positive levels by the end of 2021 and onward. The return on total capital was in a negative range between March 2020 and June 2021, with values ranging from -132.18% to 3.53%. However, a positive trend emerged from September 2021 onwards, with the return on total capital increasing steadily to reach 18.24% by December 2024.
This improvement indicates that Baker Hughes Co has been more effective in generating returns from its total capital investment. A positive return on total capital signifies that the company is creating value for its investors and effectively utilizing its capital to generate profits. The increasing trend in the return on total capital over the quarters suggests that the company's profitability and efficiency in capital allocation have been improving. Overall, the positive trajectory in return on total capital reflects positively on Baker Hughes Co's financial performance and management of capital resources.
Peer comparison
Dec 31, 2024