Illinois Tool Works Inc (ITW)

Return on equity (ROE)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	US$ in thousands	3,488,000	2,957,000	3,034,000	2,694,000	2,109,000
Total stockholders’ equity	US$ in thousands	3,317,000	3,012,000	3,088,000	3,625,000	3,181,000
ROE		105.16%	98.17%	98.25%	74.32%	66.30%

December 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $3,488,000K ÷ $3,317,000K
= 105.16%

Illinois Tool Works Inc has demonstrated a consistent improvement in its return on equity (ROE) over the past five years. The ROE stood at 66.30% as of December 31, 2020, and has steadily increased to 105.16% by the end of December 31, 2024. This signifies that the company has been effectively utilizing its equity to generate profits for its shareholders.

The significant upward trend in ROE indicates that Illinois Tool Works Inc is efficiently managing its assets and liabilities to enhance shareholder value. A higher ROE reflects the company's ability to generate more profits from its shareholder's equity investment.

Overall, the increasing ROE for Illinois Tool Works Inc suggests that the company's management is effectively employing its resources to generate higher profitability and create value for its shareholders over the years.