Illinois Tool Works Inc (ITW)

Return on assets (ROA)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	US$ in thousands	2,957,000	3,034,000	2,694,000	2,109,000	2,521,000
Total assets	US$ in thousands	15,518,000	15,422,000	16,077,000	15,612,000	15,068,000
ROA		19.06%	19.67%	16.76%	13.51%	16.73%

December 31, 2023 calculation

ROA = Net income ÷ Total assets
= $2,957,000K ÷ $15,518,000K
= 19.06%

Illinois Tool Works, Inc. has shown a consistent growth in its return on assets (ROA) over the past five years. In 2023, the company's ROA stands at 19.06%, a slight decrease from the previous year's 19.67% but still at a healthy level. This indicates that for every dollar of assets, the company generated a net income of 19.06 cents in 2023.

Looking back, the company has exhibited a strong performance in utilizing its assets efficiently to generate profits. The ROA has steadily improved from 13.51% in 2020 to a peak of 19.67% in 2022, indicating effective asset management and operational efficiency.

Although there was a slight dip in 2023, it is essential to consider the broader trend of consistent improvement in ROA over the period. This suggests that Illinois Tool Works has been successful in optimizing its asset utilization and generating profits over the years, which is a positive indicator of the company's operational efficiency and overall financial health.