In 2010, Halliburton produced revenue of $17,973 billion and operating income of $3,009 billion, reflecting an operating margin of approximately 17%. Revenue increased by $3,298 billion, or 22% from 2009, while operating income increased $1,015 billion, or 51% from 2009. According to Halliburton’s 2010 Annual Report, “these increases were due to its customers’ higher capital spending throughout 2010, led by increased drilling activity and pricing improvements in North America” (Hal 2010 annual report). However, Halliburton remains cautious because of the shifts in oil and natural gas prices and supply/demand factors. These “shifts” are important for equipment and services providers in the oil and gas industry because it affects the capital spending decisions of oil and gas producers as well. Major oil companies and nationalized oil companies (known as the upstream producers) are the lifeblood of the oilfield service industry. These upstream producers want high-growth and low-cost opportunities (Glickman). It is therefore necessary for Halliburton to evaluate its performance and analyze its financial position compared to other companies in the industry in order to be prosperous and successful. Important factors of a company’s outlook are its financial strength and weaknesses. These factors can be evaluated by reviewing the firm’s financial statements and using ratios to help measure a company’s liquidity, leverage, activity, profitability, and growth. Financial ratios are computed by using the information found in a company’s financial statements: primarily income statement and balance sheet. The calculations from the current year, previous years, and other companies in the industry are used as a basis to identify and ev... ... middle of paper ... ...ewart ,CFA. 2011. " GICS Sub-Industry Summary: Oil & Gas Equipment & Services." Standard and Poor's. 29 Sept 2011. Web. 8 Jan 2012. . halliburton.com. Halliburton. 2011. Web. 2 Jan 2012. . hoovers.com “Halliburton Company.” 2011. Hoovers: A D&B Company. Web. 2 Jan 2012. . Lokey, Colin. “Halliburton And Schlumberger Will Benefit From An Increase In Oil Majors' Capital Expenditures.” Seeking Alpha. 26 Dec 2011. Web. 8 Jan 2012. .
Ratio analysis are useful tools when judging the performance of a company by weighing and evaluating the operating performance (Block-Hirt). There are 13 significant ratios that can separate by four main categories, profitability, asset utilization, liquidity and debt utilization ratios. The ratio analysis covered here consists of eight various ratios with at least one from each of these main categories. These ratios were used to compare and contrast the performance of Verizon versus AT& T over the years 2005 and 2006.
Lockheed Martin is an organization that heavily relies on its defense contracts in order to generate revenue. In 2005, 95% of Lockheed Martin’s revenue came from the US Department of Defense, other US Federal government agencies and foreign military customers (Defense News, 2007). Lockheed Martin earns this revenue by winning government contracts. As previously noted, Lockheed Martin has a large customer base with the US Department of Defense. The company is the largest provider of IT services, systems integration, and training to the government (Lockheed Martin, 2008). Other customers that provide revenue for Lockheed Martin are international governments and some commercial sales of products and services (Lockheed Martin, 2008).
General Electric Company (GE) is a diversified technology, media and financial services company. With products and services ranging from aircrafts engines, power generation, water processing and security technology to medical imaging, business and consumer financing, media content and industrial products, it serves in more than 100 countries. This analysis will use financial ratios to see just how GE is performing as a Fortune 500 company.
Two best indicators are whether the company is recording gains in financial strength and profitability and whether the company’s competitive strength and market standing are improving. (69)
The financial health of a publicly traded company is used by potential investors looking to add value and profit to his or her portfolio. One may obtain this data from many different sources such as those used in this paper. The Securities and Exchange Commission, SEC, was founded to help protect investors by requiring by law publicly traded companies provide credible and relevant financial data for the public to access. There are also many online sites such as YahooFinance.com that anyone with access to the internet can use to research companies. Access to this financial data is the easy part, interpreting it is another matter. There are numerous ways to compile this data such as the common-size analysis (hor...
Lockheed Martin is headquartered in Bethesda, Maryland principally engaged in global security and aerospace sustainment technology systems. This company is a large proponent of my work, and one of the largest military contractors. As a manufacturer of aircraft and components, and one of the two main competitors for the government’s business, Lockheed Martin engineers some of the major lines of defense that I see and work with every day. My job revolves around whether these defensive tools will perform as advertised in order to help us complete our mission. Innovation drives this company to be a financial giant not only in this decade, but for over a century. The history of the company is quite extensive, beginning as a small, few man show
Any successful business owner or investor is constantly evaluating the performance of the companies they are involved with, comparing historical figures with its industry competitors, and even with successful businesses from other industries. To complete a thorough examination of any company's effectiveness, however, more needs to be looked at than the easily attainable numbers like sales, profits, and total assets. Luckily, there are many well-tested ratios out there that make the task a bit less daunting. Financial ratio analysis helps identify and quantify a company's strengths and weaknesses, evaluate its financial position, and shows potential risks. As with any other form of analysis, financial ratios aren't definitive and their results shouldn't be viewed as the only possibilities. However, when used in conjuncture with various other business evaluation processes, financial ratios are invaluable. By examining Ford Motor Company's financial ratios, along with a few other company factors, this report will give a clear picture of how the company is doing now and should do in the future.
Technology has allowed greater access to information (including misinformation). The use of financial indicators helps identify successful companies. This practice has been in effect for many years. Indicators such as return on equity (ROE), earnings and earnings growth are common place when valuing a firm. These common indicators can be used to identify sound investment opportunities. Understanding how investors evaluate a firm is critical to the firm optimizing value and meeting stakeholder’s expectations.
A company with an annual revenue of $41.4 billion must be financially sound, right? The answer is…“not necessarily!” However, there are tools available that will help determine if our selected company is financially sound. Ratio analyses are those tools used to evaluate the performance of a business and identify potential problems.
Evaluating a company’s financial condition can be done by looking at its profitability or its ability to satisfy long-term commitments. These measures can be viewed through an analysis of a company’s financial statements, including the balance sheet and income statement. This paper will look at the status of Scholastic Company’s (Scholastic) ability to satisfy its long-term commitments and at the profitability of Daktronics, Inc. (Daktronics). This paper will include various financial ratio calculations and an analysis of the notable trends. It will also discuss the profitability and long-term borrowing positions of the firms discussed.
Ratios traditionally measure the most important factors such as liquidity, solvency and profitability, as well as other measures of solvency. Different studies have found various ratios to be the most efficient indicators of solvency. Studies of ratio analysis began in the 1930’s, with several studies of the concluding that firms with the potential to file bankruptcy all exhibited different ratios than those companies that were financially sound.
Halliburton Management System: Lessons learned during deployment and implementation. (1996). Retrieved Nov. 13, 2008 from website www.biblioteca.iapg.org.ar/iapg
Organizations use financial statements and ratio analysis assess financial performance viability. The ratio analysis are used to identify trends and to perform organizational comparison (financial) with other companies within same industry. Ratio analysis, using data reported on the financial statements, are divided into five major categories: common size, liquidity, solvency, efficiency, and profitability. This paper will assess the financial stability of John Hopkins Hospital (JHH) using the five ratio analysis.
The degree of competition in an industry depends on factor such as the threat of new competitors and/or the magnitude of their current competitor. To establish a strategic agenda for dealing with their competitors, a company must understand how they work in its industry and how they affect the company in its particular situation (Pearce, 2005). The threat of modern products or services is one of the major concerns for Wabtec. With competitors such as Lockheed Martin gaining ground on Wabtec, the company needs to keep its products differentiated at a competitive price and improve customer satisfaction. Wabtec needs to set a long-term goal of improving its research and development so it will help accelerate growth and earning.
Before beginning an analysis of a company it is necessary to have a complete set of financial statements, preferably for the pas few years so that historical trends can be obtained. Ratios are a way for anyone to get an idea of the financial performance of a company by using the information contained in the financial statements. Ratios are grouped into four basic categories, liquidity, activity, profitability, and financial leverage. This document will use a variety of these ratios to analyze the firm, Sample Company, as of December 31,2000.