Illinois Tool Works Inc (ITW)

Return on total capital

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Earnings before interest and tax (EBIT) US$ in thousands 4,705,000 4,040,000 3,790,000 3,477,000 2,882,000
Long-term debt US$ in thousands — — — — —
Total stockholders’ equity US$ in thousands 3,317,000 3,012,000 3,088,000 3,625,000 3,181,000
Return on total capital 141.85% 134.13% 122.73% 95.92% 90.60%

December 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $4,705,000K ÷ ($—K + $3,317,000K)
= 141.85%

Illinois Tool Works Inc has demonstrated a consistent improvement in its return on total capital performance over the years. The company's return on total capital increased from 90.60% as of December 31, 2020, to 141.85% as of December 31, 2024. This upward trend indicates that Illinois Tool Works Inc has been effectively utilizing its total capital to generate profits and create value for its stakeholders.

The significant growth in return on total capital reflects the company's ability to generate higher returns relative to the total capital employed in its operations. Illinois Tool Works Inc's strong performance in this aspect suggests efficient capital allocation and operational effectiveness, which are key factors contributing to its financial success.

Overall, Illinois Tool Works Inc's increasing return on total capital demonstrates robust financial health and efficient management of its resources, which bodes well for its long-term sustainability and competitiveness in the market.