Halliburton Co. (NYSE:HAL)

Total Assets

The reported total assets demonstrate a rising trend from 2014 until 2015, increasing from 32,240 million US dollars to 36,942 million US dollars. Subsequently, there is a notable decline over the next three years, reaching 25,982 million US dollars by the end of 2018. The adjusted total assets, which exclude goodwill impact, follow a similar pattern but at consistently lower levels, starting at 29,910 million US dollars in 2014, peaking at 34,833 million US dollars in 2015, and declining to 23,157 million US dollars by 2018.

Shareholders’ Equity

The reported company shareholders’ equity exhibits a decreasing trajectory from 2014 through 2017, falling from 16,267 million US dollars to 8,322 million US dollars. In 2018, a slight recovery is visible, with equity increasing to 9,522 million US dollars. Adjusted shareholders’ equity, representing equity net of goodwill, mirrors this downward movement more sharply, starting from 13,937 million US dollars in 2014 and declining each year to a low of 5,629 million US dollars in 2017, followed by a modest rebound to 6,697 million US dollars in 2018.

Overall Analysis

The company’s asset base and equity both experienced growth during the initial year (2014 to 2015) before undergoing a pronounced contraction through 2017, slightly improving in 2018. The adjustments for goodwill reduce reported figures, indicating that a considerable portion of the asset and equity values may be attributed to goodwill, which appears to have diminished over the period. The declines in adjusted figures suggest potential impairments or write-downs affecting the company’s core assets and equity strength more significantly than the reported numbers alone reveal. The partial recovery in 2018 may indicate stabilization or early signs of financial improvement.

The data reveals notable fluctuations in the company's operational efficiency, financial structure, and profitability over the five-year period from 2014 to 2018.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios exhibit a declining trend from 2014 to 2016, decreasing from 1.02 to 0.59 (reported) and from 1.10 to 0.65 (adjusted), indicating reduced efficiency in using assets to generate sales during this period. However, from 2016 onward, there is a recovery with the ratios increasing steadily, reaching 0.92 (reported) and 1.04 (adjusted) by 2018, suggesting an improvement in asset utilization.

Financial Leverage

Financial leverage shows a consistent upward trend from 2014 through 2017, with reported leverage rising from 1.98 to 3.01 and adjusted leverage increasing more markedly from 2.15 to 3.98. This reflects a growing reliance on debt or other liabilities to finance assets. In 2018, there is a slight reduction in leverage ratios, reported at 2.73 and adjusted at 3.46, which may indicate efforts toward deleveraging or capital restructuring.

Return on Equity (ROE)

The reported ROE declines sharply from 21.52% in 2014 to negative values in 2015 (-4.34%) and 2016 (-61.25%), indicating significant losses impacting shareholder returns. Although negative, the magnitude of losses decreases in 2017 (-5.56%), and by 2018, ROE returns to positive territory (17.39%). Adjusted ROE follows a similar pattern but with more pronounced negative values in 2016 (-82.39%) and 2017 (-8.23%). By 2018, adjusted ROE shows a strong recovery to 24.73%, suggesting that goodwill adjustments have a material impact on reported profitability.

Return on Assets (ROA)

ROA mirrors ROE trends, with reported figures dropping from 10.86% in 2014 to negative values in 2015 (-1.82%) and 2016 (-21.34%), reflecting decreased operational efficiency and profitability. There is slight improvement in 2017 (-1.85%) and a return to positive ROA at 6.37% in 2018. Adjusted ROA follows a similar trajectory but with slightly more negative values in the middle years and a higher recovery level at 7.15% in 2018, consistent with the pattern observed in adjusted ROE.

Overall, the data illustrates a period of pronounced financial and operational challenges between 2015 and 2017 marked by diminished asset turnover, increased financial leverage, and substantial losses. The subsequent recovery in 2018 across all key metrics, more pronounced when adjusted for goodwill, indicates an improvement in both operational efficiency and profitability, accompanied by a modest reduction in financial leverage.

Total Assets

There is a general declining trend in total assets from 2014 to 2018. Reported total assets decreased from 32,240 million US dollars in 2014 to 25,982 million US dollars in 2018, representing a reduction of approximately 19.4%. Similarly, adjusted total assets, which exclude goodwill, follow a comparable downward trajectory from 29,910 million US dollars in 2014 to 23,157 million US dollars in 2018, a decrease of about 22.6%. The adjustments consistently show lower asset values, indicating that goodwill constitutes a noticeable portion of the total reported assets.

Total Asset Turnover

The total asset turnover ratios exhibit variable but generally improving performance over the period. Reported total asset turnover starts at 1.02 in 2014, declines sharply to 0.59 in 2016, and then improves to 0.92 by 2018. Adjusted total asset turnover follows a similar pattern but consistently presents higher ratios than the reported figures, increasing from 1.1 in 2014, bottoming at 0.65 in 2016, and rising to 1.04 in 2018. This suggests that when excluding goodwill, the company’s asset efficiency appears stronger, especially towards the end of the period.

Insights

The consistent decline in total assets may reflect asset sales, impairment, or other balance sheet reductions. Despite shrinking asset bases, the improvement in asset turnover ratios, particularly in adjusted figures, signals effective utilization of the remaining assets in generating revenue. The gap between reported and adjusted metrics emphasizes the impact of goodwill on financial ratios and highlights the importance of considering adjusted data for operational efficiency analysis.

Total Assets

The reported total assets demonstrate a peak in 2015 at 36,942 million USD, followed by a substantial decline to 27,000 million USD in 2016, and a continued decrease until 2017 when the figure stabilizes slightly around 25,000 million USD. A modest recovery is observed in 2018, with assets increasing slightly to 25,982 million USD. The adjusted total assets follow a similar trend, with the highest value recorded in 2015 at 34,833 million USD and a marked decline thereafter, reaching approximately 22,392 million USD in 2017 before showing a gradual increase to 23,157 million USD in 2018.

Shareholders’ Equity

Reported company shareholders’ equity exhibits a downward trend from 16,267 million USD in 2014 to a low of 8,322 million USD in 2017, followed by a slight recovery to 9,522 million USD in 2018. The adjusted shareholders’ equity mirrors this trend but with consistently lower values, reflecting the impact of goodwill adjustments. It declines steadily from 13,937 million USD in 2014 to 5,629 million USD in 2017, followed by a mild increase to 6,697 million USD in 2018. This pattern suggests a deterioration in net asset value adjusted for goodwill, potentially indicating increased intangible asset write-downs or impairments.

Financial Leverage

Reported financial leverage ratios increase from 1.98 in 2014 to a peak of 3.01 in 2017, indicating a rising reliance on debt relative to equity over the period. There is a slight reduction in 2018 to 2.73. The adjusted financial leverage ratio, which accounts for goodwill, is appreciably higher across all periods and exhibits a more pronounced upward trajectory, rising from 2.15 in 2014 to 3.98 in 2017 before decreasing to 3.46 in 2018. This suggests that when intangible assets are excluded, the company’s financial leverage is significantly higher, underscoring greater risk exposure in terms of debt levels relative to tangible equity.

Summary Insights

Overall, the data reveals a pattern of asset and equity contraction after 2015, accompanied by increasing financial leverage ratios, especially when adjusted for goodwill. The reductions in adjusted total assets and shareholders’ equity imply substantial intangible asset adjustments, impacting the company’s net worth and capital structure. The elevated adjusted leverage ratios highlight an increasing aggressiveness or risk in financing strategy, which slightly moderates towards the end of the period. The modest improvement in 2018 figures across assets and equity may indicate early signs of stabilization or recovery following a challenging period.

Shareholders’ Equity Trends

The reported shareholders’ equity shows a declining trend from 16,267 million US dollars at the end of 2014 to 8,322 million by the end of 2017, before increasing slightly to 9,522 million in 2018. The adjusted shareholders’ equity, which accounts for goodwill adjustments, follows a similar pattern but at consistently lower values, starting at 13,937 million in 2014 and dropping sharply to 5,629 million in 2017, then recovering somewhat to 6,697 million in 2018. This trend suggests a significant reduction in net assets over the period, particularly pronounced when adjustments for goodwill are considered.

Return on Equity (ROE) Patterns

The reported ROE exhibits volatility with a strong positive return of 21.52% in 2014 followed by a sharp decline into negative territory in 2015 (-4.34%). It further deteriorates dramatically in 2016 to -61.25%, before improving modestly in 2017 (-5.56%) and then recovering to a positive 17.39% in 2018. The adjusted ROE mirrors these movements but intensifies the magnitude of changes, showing a peak of 25.11% in 2014 and a deeper trough of -82.39% in 2016, followed by an improvement to 24.73% in 2018. This volatility indicates fluctuating profitability and efficiency in generating returns on equity, significantly affected by goodwill adjustments.

Overall Insights

The period under review is characterized by a notable erosion of equity value accompanied by significant fluctuations in profitability metrics. The marked downturn in both reported and adjusted figures around 2016 suggests operational or market challenges during that time. The subsequent partial recovery in 2018 reflects a positive turnaround, although equity levels remain below the initial 2014 values. The larger swings in adjusted metrics highlight the impact of goodwill on the company's financial health and performance.

Total Assets

The reported total assets showed an increase from 32,240 million USD in 2014 to a peak of 36,942 million USD in 2015, followed by a significant decline over the subsequent years, reaching 25,982 million USD by the end of 2018. Similarly, the goodwill-adjusted total assets followed a comparable trend, increasing from 29,910 million USD in 2014 to 34,833 million USD in 2015, then decreasing steadily to 23,157 million USD by 2018. This pattern indicates a contraction in asset base after 2015, possibly due to divestitures, impairments, or asset write-downs.

Return on Assets (ROA)

The reported ROA displayed a high positive level of 10.86% in 2014, but turned negative in 2015, with a substantial decline to -1.82%. This negative trend worsened dramatically in 2016 to -21.34%, followed by a slight recovery to -1.85% in 2017 and a further improvement to 6.37% in 2018. The adjusted ROA, which excludes goodwill effects, showed a very similar trend, starting at 11.7% in 2014, dipping to -1.93% in 2015, reaching a low of -23.44% in 2016, then marginally improving to -2.07% in 2017 and increasing to 7.15% by 2018. The consistency between reported and adjusted ROA suggests that the goodwill adjustments had minimal influence on profitability trends.

Overall Financial Performance Insights

The data reflects a period of considerable financial challenges following 2014, marked by shrinking asset bases and significant losses on asset efficiency as indicated by the negative ROA values from 2015 through 2017. The lowest point occurred in 2016, after which there was gradual recovery in both asset levels and profitability metrics by 2018. The recovery in ROA towards positive territory in 2018 suggests improving asset utilization and profitability. The decline in assets alongside these profitability trends may indicate strategic restructuring efforts, asset divestments, or write-downs aimed at returning to a stable financial position.