Illinois Tool Works Inc (ITW)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 4.54 | 4.67 | 5.26 | 5.18 | 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 |
Illinois Tool Works Inc demonstrates a strong solvency position based on its solvency ratios. The Debt-to-assets ratio, which measures the proportion of the company's assets financed by debt, has consistently stood at 0.00 over the entire period, indicating that ITW relies little on debt to fund its assets.
Similarly, the Debt-to-capital ratio and Debt-to-equity ratio have also remained at 0.00 throughout the period, suggesting that the company has minimal debt relative to its capital and equity, signifying a low financial risk.
The Financial leverage ratio, which reflects the proportion of a company's assets financed by debt relative to equity, shows a declining trend from 6.20 in March 2020 to 4.54 in December 2024. This indicates a decreasing reliance on debt to fund the company's assets, showcasing a strengthening financial stability and ability to meet its obligations.
Overall, Illinois Tool Works Inc's solvency ratios reflect a prudent and sustainable financial structure, with low levels of debt and a stable capital position, underscoring the company's ability to weather financial challenges and maintain long-term stability.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 16.56 | 16.26 | 15.13 | 15.30 | 15.32 | 16.17 | 16.82 | 18.16 | 18.87 | 18.74 | 18.31 | 17.65 | 17.33 | 17.31 | 16.77 | 14.70 | 14.05 | 13.85 | 14.24 | 16.00 |
The interest coverage ratio measures a company's ability to pay interest expenses on its outstanding debt. A higher interest coverage ratio indicates a company is more capable of servicing its debt obligations.
Analyzing the trend in Illinois Tool Works Inc's interest coverage ratio from March 31, 2020, to December 31, 2024, we observe a generally increasing trend from 16.00 to 16.56. This signifies the company's ability to cover its interest payments improved over the period, indicating a stronger financial position in terms of debt payment obligations.
However, there were fluctuations in the ratio during the period, with slight decreases and increases recorded in certain quarters. Despite the fluctuations, the overall trend reflects a positive improvement in the company's ability to cover its interest expenses.
It is essential for investors and creditors to monitor the interest coverage ratio over time to assess the company's financial health and its capacity to meet its debt obligations comfortably. In the case of Illinois Tool Works Inc, the increasing trend in the interest coverage ratio is a favorable indicator of its financial stability and ability to service its debt.