Illinois Tool Works Inc (ITW)

Return on equity (ROE)

		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 stockholders’ equity	US$ in thousands	3,012,000	3,088,000	3,625,000	3,181,000	3,026,000
ROE		98.17%	98.25%	74.32%	66.30%	83.31%

December 31, 2023 calculation

ROE = Net income ÷ Total stockholders’ equity
= $2,957,000K ÷ $3,012,000K
= 98.17%

Illinois Tool Works, Inc.'s return on equity (ROE) has shown fluctuations over the past five years. In 2023, the ROE stood at 98.17%, slightly lower than the 98.25% recorded in 2022. The company experienced a significant improvement in ROE from 2021 to 2022, where it increased from 74.32% to 98.25%. Comparing ROE in 2020 and 2019, there was a notable decrease from 83.31% to 66.30%.

The company's ROE performance indicates its ability to generate profit from shareholders' equity. A higher ROE suggests efficient utilization of equity capital to generate earnings, which can be a positive signal for investors. However, the fluctuations in ROE over the years may require further analysis to understand the underlying factors driving these changes, such as changes in profitability, financial leverage, or asset management efficiency.

Overall, Illinois Tool Works, Inc.'s ROE has shown variations over the past five years, and further investigation into the drivers of these fluctuations could provide insights into the company's financial performance and management effectiveness.