Illinois Tool Works Inc (ITW)

Working capital turnover

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Revenue (ttm)	US$ in thousands	15,804,000	15,837,000	15,832,000	15,791,000	15,722,000	15,435,000	14,983,000	14,643,000	14,244,000	14,098,000	13,846,000	12,735,000	12,420,000	12,414,000	12,586,000	13,627,000	13,939,000	14,050,000	14,236,000	14,513,000
Total current assets	US$ in thousands	6,235,000	6,288,000	6,404,000	6,688,000	6,270,000	6,196,000	6,371,000	6,682,000	6,374,000	6,577,000	6,509,000	6,704,000	6,523,000	6,031,000	5,609,000	5,506,000	6,253,000	6,245,000	6,289,000	6,075,000
Total current liabilities	US$ in thousands	4,675,000	3,982,000	4,040,000	5,596,000	4,460,000	4,392,000	4,294,000	3,858,000	3,470,000	2,996,000	2,960,000	2,680,000	2,589,000	2,540,000	2,042,000	2,032,000	2,154,000	2,223,000	2,188,000	3,961,000
Working capital turnover		10.13	6.87	6.70	14.46	8.69	8.56	7.21	5.19	4.90	3.94	3.90	3.16	3.16	3.56	3.53	3.92	3.40	3.49	3.47	6.87

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $15,804,000K ÷ ($6,235,000K – $4,675,000K)
= 10.13

The working capital turnover ratio measures how efficiently a company is managing its working capital to generate sales. Illinois Tool Works, Inc. showed fluctuations in its working capital turnover over the past quarters.

In Q1 2023, the company's working capital turnover was 14.66, indicating that it generated $14.66 in sales for every dollar of working capital invested. This was a significant increase compared to the previous quarter, suggesting a notable improvement in working capital efficiency.

However, in Q2 and Q3 2023, the ratio decreased to 6.80 and 6.98, respectively, signaling a decline in working capital efficiency during that period. It is worth noting that these values were below the levels seen in Q4 2022, where the ratio was 8.80.

The ratio then increased to 10.32 in Q4 2023, showing a rebound in the company's working capital efficiency to a level even higher than the one observed in the corresponding quarter of the previous year (Q4 2022).

Overall, Illinois Tool Works, Inc. experienced fluctuations in its working capital turnover, with a mix of improvements and declines in efficiency throughout the analyzed quarters. Further analysis and comparison with industry benchmarks may provide additional insights into the company's working capital management performance.