Illinois Tool Works Inc (ITW)
Operating return on assets (Operating ROA)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 4,040,000 | 3,790,000 | 3,477,000 | 2,882,000 | 3,402,000 |
| Total assets | US$ in thousands | 15,518,000 | 15,422,000 | 16,077,000 | 15,612,000 | 15,068,000 |
| Operating ROA | 26.03% | 24.58% | 21.63% | 18.46% | 22.58% |
December 31, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $4,040,000K ÷ $15,518,000K
= 26.03%
Illinois Tool Works, Inc. has demonstrated a positive trend in its operating return on assets (operating ROA) over the past five years. The company's operating ROA has increased from 22.58% in 2019 to 26.03% in 2023. This indicates that the company has been able to generate more operating income relative to its total assets over the years, reflecting strong operational efficiency and profitability.
The consistent improvement in operating ROA signifies that Illinois Tool Works has been effectively utilizing its assets to generate operating income. This could be attributed to factors such as efficient asset management, effective cost controls, and increased revenue generation.
The steady growth in operating ROA is a positive indicator for investors and stakeholders as it suggests that the company is delivering strong operational performance and creating value from its assets. Overall, the increasing trend in operating ROA for Illinois Tool Works, Inc. highlights its ability to generate profits from its operational activities and maximize returns for its shareholders.
Peer comparison
Dec 31, 2023