Illinois Tool Works Inc (ITW)

Debt-to-capital ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Long-term debt	US$ in thousands	6,339,000	6,173,000	6,909,000	7,772,000	7,754,000
Total stockholders’ equity	US$ in thousands	3,012,000	3,088,000	3,625,000	3,181,000	3,026,000
Debt-to-capital ratio		0.68	0.67	0.66	0.71	0.72

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $6,339,000K ÷ ($6,339,000K + $3,012,000K)
= 0.68

The debt-to-capital ratio of Illinois Tool Works, Inc. has fluctuated over the past five years, ranging from 0.68 in 2021 to 0.73 in 2023. This ratio indicates the proportion of debt relative to total capital, which includes both debt and equity.

The increase in the debt-to-capital ratio from 0.68 in 2021 to 0.73 in 2023 suggests that the company has taken on more debt relative to its total capital structure. This could mean that Illinois Tool Works, Inc. is relying more on debt financing to support its operations or growth initiatives.

It is essential to consider the reasons behind the changes in the debt-to-capital ratio and assess whether the company's overall debt level is sustainable in the long term. A higher debt-to-capital ratio may indicate increased financial risk and potential challenges in meeting debt obligations, while a lower ratio may imply a more conservative capital structure. Further analysis of the company's financial position and cash flow would provide additional insights into the implications of these changes in the debt-to-capital ratio over the years.