In 2010, Halliburton produced revenue of $17.973 billion and operating profit of $3.009 billion, reflecting an operating margin of approximately 17%. Revenue increased by $3.298 billion, or 22%, compared to 2009, while operating profit increased by $1.015 billion, or 51%, compared to 2009. According to Halliburton's 2010 annual report, "these increases are due to increased capital spending by its customers during 2010, driven by increased drilling activity and pricing improvements in North America” (2010 mid-year annual report. However, Halliburton remains cautious due to changes in prices oil and natural gas prices and supply/demand factors. These “changes” are important to oil and gas equipment and service providers because they also impact oil and gas producers' capital spending decisions. gas. Major oil companies and nationalized oil companies (known as upstream producers) are the lifeblood of the oilfield services industry. These upstream producers desire low-cost, high-growth opportunities (Glickman). It is therefore necessary for Halliburton to evaluate its performance and analyze its financial position compared to other companies in the industry to be prosperous and successful. Important factors of a company's prospects are its financial strength and weakness. These factors can be evaluated by examining the company's financial statements and using ratios to help measure a company's liquidity, leverage, activity, profitability and growth. Financial ratios are calculated using information present in a company's financial statements: mainly income statement and balance sheet. 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 Subsector Summary: Oil and Gas Equipment and Services.” Standard and poor. September 29, 2011. Web. January 8, 2012.halliburton.com. Halliburton. 2011. Network. January 2, 2012..hoovers.com “Halliburton Company”. 2011. Hoover: A D&B Company. Network. January 2, 2012..Lokey, Colin. “Halliburton and Schlumberger will benefit from increased capital spending by the oil majors.” In search of the Alpha. December 26, 2011. Web. January 8 2012..