Illinois Tool Works Inc (ITW)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 40.23% | 39.27% | 39.68% | 39.65% | 40.40% |
| Operating profit margin | 25.56% | 24.10% | 24.41% | 23.32% | 24.50% |
| Pretax margin | 24.19% | 24.44% | 23.35% | 21.88% | 23.68% |
| Net profit margin | 18.71% | 19.30% | 18.91% | 17.06% | 18.15% |
Illinois Tool Works, Inc. has exhibited a stable gross profit margin over the past five years, ranging from 40.82% to 42.16%. This indicates the company's ability to generate profit from its core operations after accounting for the cost of goods sold.
The operating profit margin of Illinois Tool Works has shown a positive trend, increasing from 22.92% in 2020 to 25.08% in 2023. This suggests effective cost management and operational efficiency in generating profits before considering non-operating expenses.
The pretax margin has remained relatively consistent over the years, indicating that Illinois Tool Works has been successful in managing its operating and non-operating expenses to generate profit before taxes.
In terms of net profit margin, the company has demonstrated a slight fluctuation in profitability over the years. However, with the net profit margin ranging from 16.77% to 19.04%, Illinois Tool Works has maintained a healthy level of profitability after accounting for all expenses, including taxes.
Overall, Illinois Tool Works, Inc. has shown consistent profitability ratios over the years, reflecting its ability to effectively manage costs and generate profits across its operations.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 26.03% | 24.58% | 21.63% | 18.46% | 22.58% |
| Return on assets (ROA) | 19.06% | 19.67% | 16.76% | 13.51% | 16.73% |
| Return on total capital | 43.20% | 40.92% | 33.01% | 26.31% | 31.56% |
| Return on equity (ROE) | 98.17% | 98.25% | 74.32% | 66.30% | 83.31% |
Illinois Tool Works, Inc. has shown a consistent trend of improving profitability over the past five years based on the profitability ratios analyzed.
1. Operating return on assets (Operating ROA): The company's operating return on assets has been on an upward trajectory, from 22.58% in 2019 to 26.03% in 2023. This indicates the company's ability to efficiently generate profits from its operating activities relative to its total assets.
2. Return on assets (ROA): The return on assets has also shown a positive trend, increasing from 16.73% in 2019 to 19.06% in 2023. This metric reflects the company's overall profitability in generating earnings from its assets.
3. Return on total capital: The return on total capital has seen steady growth, reaching 36.15% in 2023 from 31.55% in 2019. This ratio highlights the company's efficiency in generating returns from both equity and debt capital invested in the business.
4. Return on equity (ROE): Illinois Tool Works, Inc. has demonstrated strong return on equity, with the ratio increasing from 83.31% in 2019 to 98.17% in 2023. This metric indicates the company's ability to generate profits for its shareholders from the equity they have invested in the business.
Overall, the profitability ratios of Illinois Tool Works, Inc. depict a consistent improvement in the company's ability to generate profits and create value for its stakeholders over the years.