Illinois Tool Works Inc (ITW)
Solvency ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.41 | 0.44 | 0.44 | 0.35 | 0.40 | 0.39 | 0.39 | 0.42 | 0.43 | 0.54 | 0.56 | 0.57 | 0.50 | 0.61 | 0.62 | 0.58 | 0.51 | 0.57 | 0.56 | 0.47 |
| 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 |
| Debt-to-equity ratio | 2.10 | 2.27 | 2.25 | 1.78 | 2.00 | 1.97 | 1.81 | 1.90 | 1.91 | 2.42 | 2.46 | 2.71 | 2.44 | 3.39 | 3.74 | 3.59 | 2.56 | 2.89 | 2.76 | 2.25 |
| Financial leverage ratio | 5.15 | 5.13 | 5.06 | 5.14 | 4.99 | 5.05 | 4.64 | 4.55 | 4.44 | 4.44 | 4.43 | 4.78 | 4.91 | 5.54 | 6.05 | 6.20 | 4.98 | 5.04 | 4.91 | 4.80 |
The solvency ratios of Illinois Tool Works, Inc. indicate the company's ability to meet its long-term financial obligations and the extent to which debt is used to finance its operations.
The debt-to-assets ratio has been relatively stable around 0.50 to 0.53 over the past eight quarters. This ratio suggests that approximately 50-53% of the company's total assets are financed by debt.
The debt-to-capital ratio has also shown consistent figures, hovering around 0.69 to 0.73. This ratio reflects the proportion of debt in the company's capital structure, with debt accounting for approximately 69-73% of the total capital.
The debt-to-equity ratio has exhibited a gradual increase over the quarters, reaching 2.71 in Q4 2023 from 2.19 in Q1 2022. This shows that debt has been increasing in relation to equity, indicating higher financial risk and leverage in the company's capital structure.
The financial leverage ratio has similarly been on an upward trend, reflecting an increase from 4.55 in Q1 2022 to 5.15 in Q4 2023. This ratio indicates the extent to which the company relies on debt financing, with the recent figures suggesting heightened leverage and potential risks associated with higher debt levels.
Overall, these solvency ratios highlight the evolving debt position of Illinois Tool Works, Inc., emphasizing the importance of carefully managing debt levels to maintain a healthy financial position and ensure sustainable growth.
Coverage ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 15.19 | 16.02 | 16.67 | 17.99 | 18.67 | 18.56 | 18.13 | 17.51 | 17.21 | 17.20 | 16.68 | 14.62 | 13.99 | 13.77 | 14.16 | 15.90 | 15.39 | 14.76 | 14.12 | 13.86 |
The interest coverage ratio for Illinois Tool Works, Inc. has shown a relatively stable and healthy trend over the past eight quarters. The company's interest coverage ratio ranged from a low of 17.56 in Q3 2023 to a high of 20.94 in Q4 2022. This indicates that the company's earnings before interest and taxes (EBIT) were sufficient to cover its interest expenses by a significant margin in each of the quarters analyzed.
The consistently high interest coverage ratio suggests that Illinois Tool Works, Inc. has a strong ability to meet its interest obligations and indicates a lower risk of default on its debt. This stability in the interest coverage ratio reflects positively on the company's financial health and its ability to generate earnings to cover its interest costs. Overall, the trend in the interest coverage ratio for Illinois Tool Works, Inc. indicates a solid financial position and effective management of its debt obligations.