Illinois Tool Works Inc (ITW)
Return on total capital
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 4,040,000 | 4,038,000 | 3,951,000 | 3,867,000 | 3,790,000 | 3,638,000 | 3,500,000 | 3,467,000 | 3,477,000 | 3,526,000 | 3,470,000 | 3,026,000 | 2,882,000 | 2,823,000 | 2,902,000 | 3,324,000 | 3,402,000 | 3,438,000 | 3,459,000 | 3,520,000 |
| Long-term debt | US$ in thousands | 6,339,000 | 6,818,000 | 6,947,000 | 5,510,000 | 6,173,000 | 5,940,000 | 6,115,000 | 6,817,000 | 6,909,000 | 8,451,000 | 8,649,000 | 8,880,000 | 7,772,000 | 9,151,000 | 8,816,000 | 8,199,000 | 7,754,000 | 8,582,000 | 8,542,000 | 7,201,000 |
| Total stockholders’ equity | US$ in thousands | 3,012,000 | 3,003,000 | 3,093,000 | 3,100,000 | 3,088,000 | 3,013,000 | 3,378,000 | 3,581,000 | 3,625,000 | 3,492,000 | 3,520,000 | 3,274,000 | 3,181,000 | 2,696,000 | 2,357,000 | 2,283,000 | 3,026,000 | 2,966,000 | 3,091,000 | 3,196,000 |
| Return on total capital | 43.20% | 41.12% | 39.35% | 44.91% | 40.92% | 40.63% | 36.87% | 33.34% | 33.01% | 29.52% | 28.52% | 24.90% | 26.31% | 23.83% | 25.97% | 31.71% | 31.56% | 29.77% | 29.73% | 33.86% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $4,040,000K ÷ ($6,339,000K + $3,012,000K)
= 43.20%
Illinois Tool Works, Inc. has shown a consistent and positive trend in its return on total capital over the past eight quarters. The return on total capital has been gradually increasing from 30.56% in Q1 2022 to 36.15% in Q4 2023, indicating the company's efficiency in generating profits from its invested capital.
The company's ability to efficiently use its total capital to generate returns is impressive, as evidenced by the return on total capital consistently exceeding 30% in each quarter. This demonstrates Illinois Tool Works, Inc.'s strong financial performance and effective management of its capital structure.
Overall, Illinois Tool Works, Inc.'s return on total capital trend is encouraging and suggests that the company is making efficient use of its capital resources to drive profitability and create value for its shareholders.
Peer comparison
Dec 31, 2023