Halliburton Co. (NYSE:HAL)

The financial data reveals notable fluctuations in the company's profitability and capital structure over the examined period.

Return on Assets (ROA)

The ROA shows a significant decline from a positive 10.86% in 2014 to a negative -1.82% in 2015, followed by a further decrease to -21.34% in 2016. Subsequent years show some recovery, with ROA improving to -1.85% in 2017 and reaching a positive 6.37% in 2018. This trend suggests a period of operational challenges and declining asset efficiency during 2015-2017, with partial recovery by 2018.

Financial Leverage

Financial leverage indicates a rising trend from 1.98 in 2014 to a peak of 3.01 in 2017, before decreasing to 2.73 in 2018. The increase over the first four years implies greater use of debt relative to equity, which could have amplified risk and impacted profitability negatively, as evidenced by declining ROA and ROE during this period. The reduction in leverage in 2018 may signify deleveraging efforts to improve financial stability.

Return on Equity (ROE)

ROE follows a pattern similar to ROA but is more pronounced. It starts at a robust 21.52% in 2014, decreases sharply to -4.34% in 2015, and plunges dramatically to -61.25% in 2016. In 2017, ROE remains negative at -5.56% but shows recovery to a positive 17.39% in 2018. The severe negative returns suggest significant losses impacting shareholder equity, likely influenced by high financial leverage and poor asset returns. The rebound in 2018 indicates improved profitability and equity value.

Overall, the data illustrates a challenging period marked by decreasing asset efficiency and profitability accompanied by increased leverage, which heightened financial risk. However, the partial recovery in 2018 reflects improved operational performance and financial management.

Net Profit Margin

The net profit margin exhibits significant volatility over the analyzed periods. It starts at a positive 10.65% in 2014, followed by a sharp decline into negative territory in 2015 (-2.84%) and an even steeper decline in 2016 reaching -36.27%. The margin improves somewhat in 2017 to -2.25%, and returns to a positive 6.9% by 2018. This pattern indicates a period of considerable profitability challenges peaked in 2016 with a partial recovery by 2018.

Asset Turnover

Asset turnover declines substantially from 1.02 in 2014 to 0.64 in 2015 and further to 0.59 in 2016, indicating reduced efficiency in utilizing assets to generate sales. It improves in the subsequent years, reaching 0.82 in 2017 and 0.92 in 2018, showing a gradual recovery in operational efficiency though not returning to the 2014 peak level.

Financial Leverage

Financial leverage steadily increases from 1.98 in 2014 to a peak of 3.01 in 2017, suggesting an increasing reliance on debt relative to equity during this period. In 2018, leverage decreases to 2.73, indicating some deleveraging or an adjustment toward a more balanced capital structure.

Return on Equity (ROE)

The return on equity follows a similar pattern to net profit margin, starting at 21.52% in 2014, plunging to -4.34% in 2015 and dramatically worsening to -61.25% in 2016. It slightly improves to -5.56% in 2017 before recovering to a positive 17.39% in 2018. This suggests the company faced substantial profitability and performance challenges mid-period but began to restore shareholder value toward the end.

Over the reviewed period, several key financial ratios reveal notable fluctuations and trends. The tax burden ratio exhibits instability, initially at 0.73 in 2014, with missing data for 2015 and 2016, a significant negative value of -0.69 in 2017, and a recovery to 0.91 in 2018. This suggests considerable variability in tax effects on profitability within the timeframe.

The interest burden ratio, available for three years, shows a decline from 0.92 in 2014 to 0.49 in 2017, followed by an increase to 0.75 in 2018. This pattern indicates fluctuating interest expenses relative to earnings before interest and taxes, impacting net income margins.

The EBIT margin experiences a sharp deterioration between 2014 and 2016, descending from a positive 15.73% to a severe negative margin of -43.58%. By 2017 and 2018, an improvement trend appears, with EBIT margin recovering to 6.66% and 10.05%, respectively, yet remaining below the 2014 level. This reflects initial operational challenges followed by a gradual operational recovery.

Asset turnover ratios decrease from 1.02 in 2014 to a low of 0.59 in 2016, before rebounding to 0.92 in 2018. This trend implies a reduction in efficiency of asset utilization mid-period, with partial restoration towards the end of the period.

Financial leverage steadily increases from 1.98 in 2014 to a peak of 3.01 in 2017, before declining to 2.73 in 2018. The rise implies a growing reliance on debt financing until 2017, with a slight deleveraging in 2018, which may correlate with financial risk and cost of capital fluctuations.

Return on equity (ROE) mirrors the operational and financial volatility observed in other metrics, falling dramatically from 21.52% in 2014 to a negative 61.25% in 2016, indicating significant losses or declines in shareholder value. Although ROE remains negative in 2017 at -5.56%, it recovers substantially to 17.39% in 2018, suggesting an improving but still variable profitability scenario.

In summary, the data reveals a period marked by notable operational difficulties and financial instability, especially between 2015 and 2017, evidenced by declining margins, ROE, and asset efficiency alongside increased leverage. The year 2018 shows signs of recovery and improved financial health, though some ratios have not returned to their initial levels observed in 2014.

Net Profit Margin

The net profit margin experienced significant fluctuations over the analyzed period. Initially, it was positive at 10.65% in 2014. However, it turned negative in 2015, dropping sharply to -2.84%, and further declined to a substantial loss of -36.27% in 2016. The margin improved slightly in 2017, remaining negative at -2.25%, before recovering to a positive 6.9% in 2018. This pattern indicates volatility in profitability, with a notable trough in 2016 followed by gradual recovery.

Asset Turnover

The asset turnover ratio showed a downward trend from 2014 to 2016, decreasing from 1.02 to 0.59. In 2017, the ratio increased to 0.82 and continued to improve to 0.92 in 2018. This suggests that the efficiency at which the company utilized its assets to generate revenue declined significantly initially but demonstrated a recovery in the latter years.

Return on Assets (ROA)

Return on assets mirrored the trends observed in net profit margin, starting with a positive 10.86% in 2014, before dropping to negative values in the subsequent years. It declined to -1.82% in 2015, reached a low of -21.34% in 2016, and slightly improved to -1.85% in 2017. By 2018, ROA rebounded to a positive 6.37%. These movements reflect decreased profitability relative to the asset base during 2015 and 2016, with some recovery in 2017 and 2018.

Tax Burden

The tax burden ratio shows significant volatility over the period. It starts at 0.73 in 2014, with missing data for 2015 and 2016, then drops sharply to -0.69 in 2017, indicating a loss or tax benefit that reversed the expected tax expense. In 2018, the ratio recovers to 0.91, suggesting a return to a positive tax expense burden.

Interest Burden

This ratio begins at 0.92 in 2014, showing a moderate decrease to 0.49 in 2017, which implies a higher interest expense relative to earnings before interest and taxes in that year. The ratio improves to 0.75 in 2018, indicating some recovery but still below the 2014 level. Data for 2015 and 2016 is missing, limiting trend analysis for those years.

EBIT Margin

The EBIT margin exhibits a dramatic decline from 15.73% in 2014 to negative values in the following years. It drops to -2.04% in 2015, falls even further to -43.58% in 2016, signaling significant operational losses. The margin improves to 6.66% in 2017 and further to 10.05% in 2018, reflecting a partial recovery of profitability, yet still below the initial 2014 level.

Asset Turnover

Asset turnover declines from 1.02 in 2014 to 0.64 in 2015 and decreases slightly to 0.59 in 2016, indicating deteriorating efficiency in using assets to generate revenue. It then improves to 0.82 in 2017 and rises further to 0.92 in 2018, suggesting a gradual restoration of asset utilization efficiency.

Return on Assets (ROA)

ROA mirrors the fluctuations observed in EBIT margin and asset turnover. It starts positively at 10.86% in 2014, drops to negative territory at -1.82% in 2015, and plunges to -21.34% in 2016, reflecting substantial losses and impaired asset profitability. The ROA improves to -1.85% in 2017 and recovers to 6.37% in 2018, yet remains below the initial 2014 performance, indicating partial recovery.

The financial data reflects notable fluctuations and volatility over the analyzed period, with several significant shifts in profitability and burden ratios.

Tax Burden

The tax burden ratio exhibits considerable variability, starting at 0.73 in 2014, with missing data for 2015 and 2016, sharply turning negative at -0.69 in 2017 before recovering to 0.91 in 2018. This suggests periods of tax benefit or credit, particularly in 2017, followed by normalization.

Interest Burden

The interest burden ratio decreases from 0.92 in 2014 to 0.49 in 2017, indicating an increased interest expense impact during this period, before improving to 0.75 in 2018. Missing data for 2015 and 2016 prevents full trend continuity analysis, but a general worsening in interest coverage can be inferred for the mid-period.

EBIT Margin

Operating profitability shows a steep decline from a positive 15.73% in 2014 to deeply negative -43.58% in 2016, recovering moderately to 6.66% in 2017 and further improvement to 10.05% in 2018. This pattern indicates a period of severe operational challenges followed by gradual recovery.

Net Profit Margin

Net profitability mirrors the EBIT margin trend, declining from 10.65% in 2014 to -36.27% in 2016, with sustained negative margins in 2015 (-2.84%) and 2017 (-2.25%). By 2018, a return to profitability at 6.9% points to operational and financial stabilization.

Overall, the data portrays a company experiencing significant operational and financial difficulties particularly strong between 2015 and 2017, with recovery signs emerging in 2018. The negative tax burden and high interest burden during the downturn period highlight stress on profitability and cash flows, while improving margins in the concluding year signal renewed efficiency and profitability.