Illinois Tool Works Inc (ITW)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 15,803,000 | 15,723,000 | 14,244,000 | 12,361,000 | 13,887,000 |
| Property, plant and equipment | US$ in thousands | 1,976,000 | 1,848,000 | 1,809,000 | 1,777,000 | 1,729,000 |
| Fixed asset turnover | 8.00 | 8.51 | 7.87 | 6.96 | 8.03 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $15,803,000K ÷ $1,976,000K
= 8.00
The fixed asset turnover ratio of Illinois Tool Works, Inc. has displayed a fluctuating trend over the past five years, ranging from 7.08 to 8.62. This ratio measures the company's efficiency in generating sales revenue from its investment in fixed assets. A higher fixed asset turnover ratio indicates that the company is effectively utilizing its fixed assets to generate sales.
In 2023, the fixed asset turnover ratio decreased to 8.15 from 8.62 in the previous year. This suggests a slight decline in the company's efficiency in utilizing its fixed assets to generate sales revenue. However, it is important to note that a comparison with industry averages or competitors' ratios would provide more context for evaluating the company's performance in this regard.
Overall, Illinois Tool Works, Inc. has generally maintained a healthy level of fixed asset turnover over the analyzed period, which indicates efficient asset utilization in sales generation. It would be beneficial for the company to continue monitoring and improving this ratio to ensure ongoing operational efficiency and profitability.
Peer comparison
Dec 31, 2023