Illinois Tool Works Inc (ITW)

Working capital turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Revenue (ttm)	US$ in thousands	15,898,000	15,949,000	16,014,000	16,061,000	16,107,000	16,095,000	16,075,000	16,012,000	15,932,000	15,640,000	15,185,000	14,850,000	14,455,000	14,251,000	14,002,000	12,890,000	12,574,000	12,568,000	12,740,000	13,785,000
Total current assets	US$ in thousands	5,856,000	6,304,000	6,256,000	6,371,000	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
Total current liabilities	US$ in thousands	4,308,000	4,627,000	4,804,000	4,844,000	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
Working capital turnover		10.27	9.51	11.03	10.52	10.32	6.98	6.80	14.66	8.80	8.67	7.31	5.26	4.98	3.98	3.95	3.20	3.20	3.60	3.57	3.97

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $15,898,000K ÷ ($5,856,000K – $4,308,000K)
= 10.27

The working capital turnover ratio for Illinois Tool Works Inc has shown fluctuations over the years, indicating changes in the efficiency of the company in managing its working capital. The trend shows an improvement in the ratio from March 31, 2020, to December 31, 2021, where it increased from 3.97 to 4.98, indicating that the company generated more sales revenue relative to its working capital during this period.

From March 31, 2022, to June 30, 2023, the working capital turnover ratio spiked significantly, reaching a peak of 14.66 on March 31, 2023. This substantial increase may suggest a more efficient management of working capital, as the company generated a much higher volume of sales relative to its working capital.

However, the ratio declined from its peak by December 31, 2023, indicating a potential decrease in efficiency in utilizing working capital to generate sales revenue. Subsequently, the ratio showed some fluctuations through June 30, 2024, indicating a level of variability in the company's working capital management efficiency.

Overall, the working capital turnover ratio for Illinois Tool Works Inc has shown variability over the years, with periods of improvement as well as some fluctuations. This ratio provides insights into the company's ability to efficiently use its working capital to generate sales revenue, highlighting the importance of effective working capital management in enhancing operational performance.