Baker Hughes Co (BKR)
Solvency ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.40 | 2.40 | 2.39 | 2.38 | 2.37 | 2.34 | 2.27 | 2.23 | 2.38 | 2.53 | 2.64 | 2.82 | 2.95 | 3.22 | 3.33 | 3.25 | 2.43 | 2.40 | 3.04 | 3.03 |
The solvency ratios of Baker Hughes Co, as indicated by the debt-to-assets ratio, debt-to-capital ratio, debt-to-equity ratio, and financial leverage ratio, have shown a relatively stable trend over the past eight quarters.
The debt-to-assets ratio has ranged from 0.16 to 0.20, indicating that between 16% and 20% of the company's total assets have been financed through debt during the period under review. This suggests that the company has been effectively managing its debt load in relation to its total assets, with lower ratios signaling a healthier balance sheet.
Similarly, the debt-to-capital ratio has fluctuated between 0.28 and 0.32 over the same period. This ratio measures the proportion of the company's capital structure that is financed through debt, indicating that between 28% and 32% of Baker Hughes Co's capital has been sourced from debt. The stability of this ratio suggests that the company has maintained a consistent level of leverage in its capital structure.
The debt-to-equity ratio, which reflects the proportion of shareholder equity and debt in financing the company's assets, has ranged from 0.39 to 0.47. A lower debt-to-equity ratio is generally viewed positively as it indicates that the company relies less on debt financing and has a stronger shareholder equity position. Baker Hughes Co's ratios, while showing some fluctuation, have not strayed significantly from this range.
Lastly, the financial leverage ratio, which measures the extent to which a company has used debt in its capital structure, has varied between 2.23 and 2.40. A higher financial leverage ratio indicates a higher level of financial risk due to increased reliance on debt financing. Baker Hughes Co's ratios, although showing some variability, have generally been within a reasonable range.
Overall, based on the solvency ratios analyzed, Baker Hughes Co appears to have maintained a relatively stable and manageable level of debt in relation to its assets, capital, equity, and overall financial leverage over the past eight quarters.
Coverage ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
Interest coverage is a key financial ratio that measures a company's ability to meet its interest obligations and indicates the level of protection that its earnings provide to cover interest expenses.
Analyzing the interest coverage ratio of Baker Hughes Co over the past eight quarters reveals a positive trend. The interest coverage ratio has shown consistent improvement, indicating the company's increasing ability to cover its interest payments with its operating income.
In Q4 2023, the interest coverage ratio stood at 12.22, representing a significant increase from the previous quarter and demonstrating a strong ability to meet interest obligations. This improvement suggests that Baker Hughes Co's operating income is more than 12 times its interest expenses, providing a comfortable cushion to cover these obligations.
Moreover, the company has steadily improved its interest coverage ratio over the past year, reflecting positively on its financial health and stability. The consistent upward trend in the interest coverage ratio indicates that Baker Hughes Co has been effectively managing its debt and generating sufficient earnings to cover interest expenses.
Overall, the increasing trend in Baker Hughes Co's interest coverage ratio is a positive indicator of its financial strength and ability to meet its debt obligations, which bodes well for the company's financial stability and long-term sustainability.