Schlumberger Limited Inside the Numbers

Schlumberger Makes the Grade $SLB

Schlumberger’s profitability is no secret in the oil and gas industry, they have managed to get business in most of the major plays in America.  They continued to be one of the biggest names in the industry.  While weighing the reasons to get behind SLB these are just a things to keep in mind.

Determining a company’s financial health is a very important step in making a decision on whether or not to invest or to stay invested. There are many different ways to compute a company’s financial health. In this test, I will be considering Schlumberger Limited’s (SLB) profitability, debt and capital, and operating efficiency. Based on these criteria, we get to see sales, returns, margins, liabilities, assets, returns, and turnovers.

Note: All numbers sourced from Morningstar.

Profitability

Profitability is a class of financial metrics that are used to assess a business’s ability to generate earnings, compared with expenses and other relevant costs incurred during a specific period of time.

Based on the nine tests that Schlumberger Limited received on profitability, debt and capital, and operating efficiency, the company achieved seven passes, out of nine – this is a strong grade for financial health. Schlumberger Limited did not pass the shares outstanding and the Gross Margin aspects of the test. As the company did not pass the shares outstanding aspect of the test, this implies that the company has 98 million more shares outstanding compared to 2010. The company did not pass the the gross margin aspect of the test reveals that the company was not as efficient in its manufacturing and distribution during the production process as the previous year. These are a couple of aspects of the company to watch moving forward, but overall the company looks to be very strong regarding financial health. Based on the nine tests, overall, the company is showing strong results.

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