Baker Hughes Co (BKR)
Interest coverage
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 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 | 1,074,000 | 1,126,000 | 1,111,000 | 918,000 |
| Interest expense (ttm) | US$ in thousands | 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 | 237,000 | 233,000 | 229,000 | 236,000 |
| Interest coverage | 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 | 4.53 | 4.83 | 4.85 | 3.89 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $2,317,000K ÷ $216,000K
= 10.73
The interest coverage ratio for Baker Hughes Co has shown a consistent improvement over the past eight quarters, indicating the company's ability to meet its interest obligations from its operating income.
The trend reveals a positive trajectory, with the ratio increasing from 5.73 in Q1 2022 to 12.22 in Q4 2023. This signifies that Baker Hughes Co's operating profits are more than sufficient to cover its interest expenses, providing a cushion against potential liquidity issues.
The steady increase in the interest coverage ratio demonstrates the company's improving financial health and reduced risk of default on its debt obligations. It suggests that Baker Hughes Co has been effectively managing its interest payments relative to its earnings, which is a positive sign for investors and creditors.
Overall, the upward trend in the interest coverage ratio for Baker Hughes Co indicates a strengthening financial position and may enhance stakeholder confidence in the company's ability to manage its debt obligations successfully.
Peer comparison
Dec 31, 2023