Kim 1

Jongsu Kim

ACCT 2301

17 November 2018

The Annual Report Project

A. Introduction

This annual report project is of Baker Hughes Inc. The chief executive officer

is Martin S Craighead. The global headquarter of Baker Hughes Inc. is at

Houston, Texas. The ending date of latest fiscal year of Baker Hughes Inc. is

December 31st, 2015. Baker Hughes Inc. services in oil and gas reservoirs

with high-performance drilling, evaluation, completions and production

technology and services, integrated operations and reservoir consulting. The

independent auditors of Baker Hughes Inc. is Deloitte & Touche LLP. The

accountants say that financial statements fairly presented considering all

material of financial position and subsidiaries of Baker Hughes Inc. under

accounting principle of U.S. Also, the accountants say that Baker Hughes Inc.

had effective internal control over financial reporting. The closing market

price of the company’s stock within two weeks of the due date of the final is

$64.06. The dividend per share for the year is .68. Baker Hughes Inc. is traded

on the New York Stock Exchange (NYSE). The ticker symbol of Baker

Hughes Inc. is BHI.N.

 Kim 2

B. Ratio Analysis

C. Conclusion

I would not recommend to invest in Baker Hughes Inc. by buying its

common stock because it is not thriving and growing.

The current ratio of Baker Hughes is 3.34 while the industry average is

1.84. Baker Hughes has higher current ratio than the industry average. This

indicates the strong financial position of Baker Hughes in the industry. The

quick ratio of Baker Hughes is 1.86 while the industry average is 1.36. Baker

Hughes has more of quick asset than their liability compared to the industry

average. If Baker Hughes have to pay current obligations, they would be able

to pay all of their current obligation.

The inventory turnover of Baker Hughes is 1.39 while the industry

average is 27.67. Compared to the industry average, the inventory turnover of

Baker Huge is way lower. This indicates that number of times Baker Hughes

sells its average level of inventory over 2015 is seriously low. Because Baker

Hughes is not thriving in 2015, it holds on to its inventories so that it does not

lose more money. The debt ratio of Baker Hughes is 0.32. 32% of Baker

Hughes is debt compared to equity owners.

 Kim 3

The return on net sales of Baker Hughes is -12.54. Baker Hughes lost

$12.54 for everything sold. The return on total assets of Baker Hughes is -7.46

while the industry average is -2.66. The owners lose 7.46% to each dollar

invested in assets, which is lower than the industry average. The return on

common stockholders’ equity of Baker Hughes is -11.24 while the industry

average is -8.03. For every dollar Baker Hughes earned, their net incomes is

-11.24, which is lower than the industry average. The earning per share of

common stock of Baker Hughes is -4.53. For each share of stock, Baker

Hughes loses of $4.53. The price/earnings ratio of Baker Hughes is -14.18

while the industry average is 21.41. Baker Hughes has tremendously lower

price/earnings ratio than the industry average. This shows Baker Hughes is not

growing company in 2015. The dividend yield ratio of Baker Hughes is 0.01

while the industry average is 1.95. Only 0.01% of a stock’s market value of

Baker Hughes returns annually to stockholders as dividends. As an investor, I

would want steady income from dividends for later due to their low dividend

yield in 2015. Also, as an investor, I would be interested in high return later

due to its low return on net sales, total assets, and common stockholder’s

equity in 2015.