Illinois Tool Works Inc. (NYSE:ITW)

The financial data reveals several trends regarding the current assets and adjusted current assets over the five-year period ending December 31, 2021.

Current Assets

There is a noticeable decline from 2017 to 2018, where current assets decreased from $7,278 million to $5,778 million. This represents a significant reduction. The subsequent years show a recovery trend, with current assets increasing to $6,253 million in 2019 and further to $6,523 million in 2020. However, in 2021, current assets experienced a slight decrease to $6,374 million.

Adjusted Current Assets

Adjusted current assets follow a similar pattern. They decreased from $7,410 million in 2017 to $5,896 million in 2018, indicating a substantial decline. The figures rebounded over the next two years, reaching $6,362 million in 2019 and $6,634 million in 2020. In 2021, adjusted current assets slightly decreased to $6,520 million, mirroring the trend seen in current assets.

Overall, both current assets and adjusted current assets show an initial sharp decline from 2017 to 2018, followed by a gradual recovery through 2019 and 2020, and finally a marginal decrease in 2021. This indicates some volatility in short-term asset levels but suggests a degree of stabilization towards the end of the period examined.

The annual financial data reveals specific trends in the total assets and adjusted total assets over the five-year period from the end of 2017 through the end of 2021.

Total assets

The total assets started at 16,780 million US dollars at the end of 2017, experienced a decline in 2018 to 14,870 million US dollars, and then showed a gradual recovery through the subsequent years, reaching 16,077 million US dollars by the end of 2021. This indicates a dip in asset base between 2017 and 2018 followed by a consistent upward trend, although the assets in 2021 remain slightly below the 2017 level.

Adjusted total assets

Adjusted total assets followed a similar pattern to the total assets. They decreased from 16,691 million US dollars in 2017 to 14,637 million US dollars in 2018, then moved relatively sideways in 2019 at 14,661 million US dollars. Following this, the adjusted assets showed steady growth, reaching 15,671 million US dollars by 2021. The recovery trend here is also clear, though the adjusted figures show a somewhat more moderate increase compared to total assets over the entire period.

Overall, both total and adjusted total assets exhibited a notable decline in 2018, which might reflect strategic divestitures, asset revaluation, or other operational adjustments during that year. The subsequent years illustrate a stable and steady improvement in the asset base, suggesting positive growth or reinvestment activities. Despite the recovery, neither total assets nor adjusted total assets fully surpassed their 2017 levels by the end of 2021, indicating a cautious or gradual growth trajectory in asset accumulation.

Current Liabilities

The current liabilities exhibit variability over the five-year period. Starting at 3,053 million USD at the end of 2017, these liabilities increased to a peak of 3,542 million USD by the end of 2018. However, a significant decrease occurred in 2019, bringing the figure down to 2,154 million USD. In 2020, there was a moderate increase to 2,589 million USD, followed by a further rise to 3,470 million USD by the end of 2021. Overall, the current liabilities demonstrate a fluctuating trend with notable declines and subsequent recoveries across the years.

Adjusted Current Liabilities

The adjusted current liabilities show a pattern broadly similar to the unadjusted current liabilities but with consistently lower values. Beginning at 2,803 million USD in 2017, the adjusted figure peaked in 2018 at 3,282 million USD before declining sharply to 1,921 million USD in 2019. This was followed by a slight recovery to 2,322 million USD in 2020 and a further increase to 3,030 million USD in 2021. The adjustments appear to reduce the current liabilities by a modest amount consistently across all periods, though the overall directional movements align closely with the unadjusted liabilities.

Summary

Both current liabilities and adjusted current liabilities demonstrate cyclical movements between 2017 and 2021, with peaks in 2018 and a trough in 2019, followed by gradual increases in the subsequent years. The adjustments to current liabilities reduce the absolute amounts but do not materially change the trend direction. This pattern may reflect operational or financial management responses to changing market or company conditions during the period under review.

The financial data reveals certain trends in the total liabilities and adjusted total liabilities over the five-year period from 2017 to 2021.

Total liabilities

The total liabilities showed a slight decrease from 12,191 million USD in 2017 to 11,612 million USD in 2018. Subsequently, there was a moderate increase in the following years, reaching 12,038 million USD in 2019, 12,430 million USD in 2020, and stabilizing around 12,451 million USD in 2021. Overall, total liabilities experienced fluctuations but remained relatively stable, ending close to the initial value recorded in 2017.

Adjusted total liabilities

The adjusted total liabilities followed a similar but more consistent downward trend compared to total liabilities. Starting at 12,061 million USD in 2017, the figure declined steadily each year until 2021, reaching 11,357 million USD. This indicates a gradual reduction in liabilities when adjustments are considered, suggesting possible improvements in liability management or changes in accounting adjustments over the period.

In summary, while the total liabilities showed some year-to-year variability with a slight upward trend towards the end of the period, the adjusted total liabilities consistently decreased, implying controlled management of obligations when adjustments are taken into account.

Stockholders’ Equity Attributable to ITW

Over the five-year period from 2017 to 2021, stockholders’ equity attributable to ITW demonstrated an overall declining trend initially, followed by a gradual recovery. The equity decreased significantly from $4,585 million in 2017 to $3,026 million in 2019. Subsequently, a slight increase was observed in 2020 to $3,181 million, with a continued rise to $3,625 million in 2021. This pattern indicates a period of equity contraction during the initial years, with stabilization and improvement in the later years.

Adjusted Total Stockholders’ Equity

Adjusted total stockholders’ equity shows a somewhat different pattern but generally mirrors the trend in reported equity. Starting at $4,630 million in 2017, it declined to $3,524 million by 2019. Unlike the attributable equity, the adjustment measure rose moderately in 2020 to $3,615 million and then experienced a more robust increase in 2021, reaching $4,314 million. This indicates the adjusted equity not only recovered but surpassed some of the earlier declines, showing stronger equity positioning in the final year.

Overall Observations

Both metrics reveal a decline in the company’s equity base between 2017 and 2019, which may reflect operational challenges, market conditions, or strategic decisions impacting retained earnings or valuation adjustments. The subsequent years demonstrate a positive turnaround with improving equity figures. The adjusted total stockholders’ equity exhibited a more pronounced recovery by 2021 compared to the strictly attributable equity, suggesting that adjustments—potentially for non-recurring items or other accounting considerations—contributed positively to the equity standing.

The financial data exhibits several notable trends in the capital structure over the five-year period from 2017 to 2021.

Total Reported Debt

This metric shows an overall decline from 8,328 million US dollars in 2017 to 7,687 million US dollars in 2021, with some fluctuations in the intervening years. After a decrease in 2018 to 7,380 million, there was a moderate rise through 2019 and 2020, peaking at 8,122 million before decreasing again in 2021. The trend suggests careful debt management with a tendency towards reduction by the end of the period.

Stockholders’ Equity Attributable to ITW

This figure declined sharply from 4,585 million US dollars in 2017 to 3,026 million in 2019, indicating a significant erosion in equity. However, it showed recovery in 2020 and 2021, reaching 3,625 million US dollars. The initial decline followed by a rebound suggests a period of financial challenges succeeded by stabilization or improved profitability.

Total Reported Capital

Total reported capital decreased from 12,913 million US dollars in 2017 to 10,634 million in 2018, reflecting the reduction in both debt and equity balances. Following that, it displayed a gradual upward trend from 2018 to 2021, ending slightly higher at 11,312 million US dollars. This overall trajectory indicates efforts to rebuild and expand capital resources after a dip.

Adjusted Total Debt

Adjusted total debt closely mirrors the trend observed in total reported debt, decreasing from 8,612 million in 2017 to 7,881 million in 2021. The pattern of decrease with some intermediate rises aligns with management’s attention to debt levels and possibly adjustments for financial reporting standards or reclassifications.

Adjusted Total Stockholders’ Equity

Adjusted equity followed a notable downtrend from 4,630 million US dollars in 2017 to a low of 3,524 million in 2019. Post-2019, the equity base strengthened substantially, increasing to 4,314 million by 2021, surpassing the 2017 level. This improvement indicates significant enhancement in shareholder value or retention of earnings during the later years.

Adjusted Total Capital

This metric declined between 2017 and 2018 from 13,242 million to 11,372 million US dollars and then gradually increased year-over-year to 12,195 million by 2021. The adjusted total capital improvement suggests ongoing capital build-up, possibly driven by both reduced debt and increased equity.

In summary, the data indicates a period of contraction in capital and equity in the earlier part of the timeline, followed by consistent recovery and strengthening of the balance sheet in later years. Debt management has been generally focused on moderation and reduction, while equity, both reported and adjusted, has recovered to levels at or above the initial year. Capital structure adjustments appear to have been implemented thoughtfully to stabilize and enhance financial health.

Operating revenue

The operating revenue shows a fluctuating trend over the five-year period. Starting at 14,314 million US dollars in 2017, the revenue increased moderately to 14,768 million US dollars in 2018. However, it decreased to 14,109 million US dollars in 2019, followed by a more pronounced decline to 12,574 million US dollars in 2020. In 2021, the revenue rebounded to 14,455 million US dollars, nearly reaching the 2018 level. This pattern indicates some volatility with a significant dip in 2020, likely influenced by external factors, followed by recovery in the subsequent year.

Adjusted operating revenue

Similar to operating revenue, the adjusted operating revenue data presents a comparable pattern across the time span. The figures start at 14,339 million US dollars in 2017, rise slightly to 14,778 million US dollars in 2018, and then decline to 14,082 million US dollars in 2019. The adjusted revenue falls more substantially to 12,608 million US dollars in 2020 before increasing again to 14,627 million US dollars in 2021. The adjustment factors do not appear to alter the overall trend, reinforcing the observation of a dip in 2020 followed by recovery.

Net Income Analysis

Net income exhibited an overall increasing trend from 2017 to 2021, starting at 1,687 million US dollars in 2017 and reaching 2,694 million US dollars in 2021. The figure peaked in 2018 at 2,563 million US dollars, followed by a small decline in 2019 and a more significant drop in 2020 to 2,109 million US dollars. The net income rebounded in 2021, surpassing previous highs.

Adjusted Net Income Analysis

Adjusted net income showed fluctuations across the period with no consistent upward or downward trend. It started at 2,299 million US dollars in 2017, decreased slightly in 2018 to 2,248 million US dollars, then increased to 2,489 million US dollars in 2019. In 2020, adjusted net income declined to 2,178 million US dollars, before experiencing a robust increase to 2,894 million US dollars in 2021, reaching the highest value in the period examined.

Comparative Observations

The adjusted net income consistently exceeded the net income in each year, indicating adjustments likely made to exclude certain items that impacted net income negatively or one-time expenses. Both metrics showed a dip in 2020, reflecting possible adverse conditions during this year, followed by recovery in 2021 with adjusted net income showing a stronger rebound percentage-wise compared to net income.