Baker Hughes Co (BKR)
Interest coverage
| 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 |
| Interest expense (ttm) | US$ in thousands | 198,000 | 188,000 | 182,000 | 193,000 | 216,000 | 235,000 | 251,000 | 253,000 | 253,000 | 284,000 | 286,000 | 291,000 | 301,000 | 275,000 | 274,000 | 278,000 | 263,000 | 257,000 | 250,000 | 237,000 |
| Interest coverage | 15.56 | 16.31 | 15.66 | 13.12 | 10.73 | 9.91 | 7.51 | 5.32 | 4.69 | 3.86 | 4.22 | 4.90 | 4.35 | 3.34 | 1.79 | 0.88 | -60.75 | -61.60 | -61.94 | -63.97 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $3,081,000K ÷ $198,000K
= 15.56
The interest coverage ratio reflects Baker Hughes Co's ability to meet its interest obligations with its operating income. Looking at the trend from March 31, 2020, to December 31, 2024, we observe a substantial improvement in Baker Hughes Co's interest coverage ratio.
The company experienced severe negative interest coverage in 2020, indicating that the operating income was insufficient to cover interest expenses during that period. However, starting from March 31, 2021, the interest coverage turned positive, indicating that the company's operating income became more than sufficient to cover its interest expenses.
The interest coverage ratio continued to improve steadily over the subsequent quarters, reaching a peak at 15.66 on June 30, 2024. This indicates a substantial enhancement in Baker Hughes Co's ability to meet its interest obligations from its operating income.
Overall, the improving trend in the interest coverage ratio suggests that Baker Hughes Co's financial health has strengthened over the analyzed period, reducing the risk associated with its debt obligations and reflecting better financial management by the company.
Peer comparison
Dec 31, 2024