Illinois Tool Works Inc (ITW)

Debt-to-capital ratio

		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
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
Debt-to-capital ratio		0.68	0.69	0.69	0.64	0.67	0.66	0.64	0.66	0.66	0.71	0.71	0.73	0.71	0.77	0.79	0.78	0.72	0.74	0.73	0.69

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 been relatively stable over the past eight quarters, ranging between 0.69 and 0.73. This indicates that a significant portion of the company's capital structure is funded by debt, with the remainder coming from equity. A ratio of around 0.70 to 0.73 suggests that the company relies moderately on debt, which can be considered within a reasonable level for many industries. Consistent ratios over time can indicate a prudent and sustainable approach to managing the capital structure. However, it is important to closely monitor changes in this ratio to ensure the company is maintaining an appropriate balance between debt and equity financing.