Illinois Tool Works Inc. (ITW)


DuPont Analysis: Decomposition of ROE
Quarterly Data

Difficulty: Beginner


Two-Component Disaggregation of ROE

Illinois Tool Works Inc., decomposition of ROE (quarterly data)

Microsoft Excel LibreOffice Calc
ROE = ROA × Leverage
Jun 30, 2019 79.75% = 16.23% × 4.91
Mar 31, 2019 78.47% = 16.36% × 4.80
Dec 31, 2018 78.76% = 17.24% × 4.57
Sep 30, 2018 53.08% = 12.27% × 4.32
Jun 30, 2018 49.72% = 12.12% × 4.10
Mar 31, 2018 43.35% = 11.16% × 3.89
Dec 31, 2017 36.79% = 10.05% × 3.66
Sep 30, 2017 45.19% = 13.91% × 3.25
Jun 30, 2017 45.38% = 13.60% × 3.34
Mar 31, 2017 46.81% = 13.54% × 3.46
Dec 31, 2016 47.84% = 13.39% × 3.57
Sep 30, 2016 41.31% = 12.59% × 3.28
Jun 30, 2016 39.51% = 12.84% × 3.08
Mar 31, 2016 36.58% = 12.37% × 2.96
Dec 31, 2015 36.35% = 12.07% × 3.01
Sep 30, 2015 37.34% = 11.79% × 3.17
Jun 30, 2015 36.19% = 11.74% × 3.08
Mar 31, 2015 58.88% = 18.39% × 3.20
Dec 31, 2014 43.20% = 16.66% × 2.59
Sep 30, 2014 = × 2.44
Jun 30, 2014 = × 2.36
Mar 31, 2014 = × 2.35

Based on: 10-Q (filing date: 2019-08-02), 10-Q (filing date: 2019-05-03), 10-K (filing date: 2019-02-15), 10-Q (filing date: 2018-11-01), 10-Q (filing date: 2018-08-03), 10-Q (filing date: 2018-05-04), 10-K (filing date: 2018-02-15), 10-Q (filing date: 2017-10-27), 10-Q (filing date: 2017-08-04), 10-Q (filing date: 2017-05-05), 10-K (filing date: 2017-02-10), 10-Q (filing date: 2016-10-28), 10-Q (filing date: 2016-08-04), 10-Q (filing date: 2016-05-06), 10-K (filing date: 2016-02-12), 10-Q (filing date: 2015-10-30), 10-Q (filing date: 2015-08-07), 10-Q (filing date: 2015-05-07), 10-K (filing date: 2015-02-13), 10-Q (filing date: 2014-10-31), 10-Q (filing date: 2014-08-08), 10-Q (filing date: 2014-05-02).

The primary reason for the increase in Return on Equity (ROE) over Q2 2019 is the increase in Financial Leverage.


Three-Component Disaggregation of ROE

Illinois Tool Works Inc., decomposition of ROE (quarterly data)

Microsoft Excel LibreOffice Calc
ROE = Net Profit Margin × Asset Turnover × Leverage
Jun 30, 2019 79.75% = 17.17% × 0.95 × 4.91
Mar 31, 2019 78.47% = 17.21% × 0.95 × 4.80
Dec 31, 2018 78.76% = 17.36% × 0.99 × 4.57
Sep 30, 2018 53.08% = 12.69% × 0.97 × 4.32
Jun 30, 2018 49.72% = 12.70% × 0.95 × 4.10
Mar 31, 2018 43.35% = 12.36% × 0.90 × 3.89
Dec 31, 2017 36.79% = 11.79% × 0.85 × 3.66
Sep 30, 2017 45.19% = 16.12% × 0.86 × 3.25
Jun 30, 2017 45.38% = 15.50% × 0.88 × 3.34
Mar 31, 2017 46.81% = 15.24% × 0.89 × 3.46
Dec 31, 2016 47.84% = 14.96% × 0.89 × 3.57
Sep 30, 2016 41.31% = 14.68% × 0.86 × 3.28
Jun 30, 2016 39.51% = 14.65% × 0.88 × 3.08
Mar 31, 2016 36.58% = 14.31% × 0.86 × 2.96
Dec 31, 2015 36.35% = 14.17% × 0.85 × 3.01
Sep 30, 2015 37.34% = 13.93% × 0.85 × 3.17
Jun 30, 2015 36.19% = 13.73% × 0.85 × 3.08
Mar 31, 2015 58.88% = 20.56% × 0.89 × 3.20
Dec 31, 2014 43.20% = 20.34% × 0.82 × 2.59
Sep 30, 2014 = × × 2.44
Jun 30, 2014 = × × 2.36
Mar 31, 2014 = × × 2.35

Based on: 10-Q (filing date: 2019-08-02), 10-Q (filing date: 2019-05-03), 10-K (filing date: 2019-02-15), 10-Q (filing date: 2018-11-01), 10-Q (filing date: 2018-08-03), 10-Q (filing date: 2018-05-04), 10-K (filing date: 2018-02-15), 10-Q (filing date: 2017-10-27), 10-Q (filing date: 2017-08-04), 10-Q (filing date: 2017-05-05), 10-K (filing date: 2017-02-10), 10-Q (filing date: 2016-10-28), 10-Q (filing date: 2016-08-04), 10-Q (filing date: 2016-05-06), 10-K (filing date: 2016-02-12), 10-Q (filing date: 2015-10-30), 10-Q (filing date: 2015-08-07), 10-Q (filing date: 2015-05-07), 10-K (filing date: 2015-02-13), 10-Q (filing date: 2014-10-31), 10-Q (filing date: 2014-08-08), 10-Q (filing date: 2014-05-02).

The primary reason for the increase in Return on Equity (ROE) over Q2 2019 is the increase in Financial Leverage.


Five-Component Disaggregation of ROE

Illinois Tool Works Inc., decomposition of ROE (quarterly data)

Microsoft Excel LibreOffice Calc
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Leverage
Jun 30, 2019 79.75% = 0.75 × 0.93 × 24.46% × 0.95 × 4.91
Mar 31, 2019 78.47% = 0.75 × 0.93 × 24.62% × 0.95 × 4.80
Dec 31, 2018 78.76% = 0.76 × 0.93 × 24.72% × 0.99 × 4.57
Sep 30, 2018 53.08% = 0.56 × 0.93 × 24.53% × 0.97 × 4.32
Jun 30, 2018 49.72% = 0.55 × 0.93 × 25.01% × 0.95 × 4.10
Mar 31, 2018 43.35% = 0.54 × 0.93 × 24.90% × 0.90 × 3.89
Dec 31, 2017 36.79% = 0.52 × 0.93 × 24.66% × 0.85 × 3.66
Sep 30, 2017 45.19% = 0.71 × 0.93 × 24.55% × 0.86 × 3.25
Jun 30, 2017 45.38% = 0.71 × 0.92 × 23.68% × 0.88 × 3.34
Mar 31, 2017 46.81% = 0.70 × 0.92 × 23.43% × 0.89 × 3.46
Dec 31, 2016 47.84% = 0.70 × 0.92 × 23.13% × 0.89 × 3.57
Sep 30, 2016 41.31% = 0.70 × 0.92 × 22.62% × 0.86 × 3.28
Jun 30, 2016 39.51% = 0.70 × 0.92 × 22.58% × 0.88 × 3.08
Mar 31, 2016 36.58% = 0.70 × 0.92 × 22.14% × 0.86 × 2.96
Dec 31, 2015 36.35% = 0.70 × 0.92 × 21.97% × 0.85 × 3.01
Sep 30, 2015 37.34% = 0.70 × 0.92 × 21.66% × 0.85 × 3.17
Jun 30, 2015 36.19% = 0.70 × 0.92 × 21.36% × 0.85 × 3.08
Mar 31, 2015 58.88% = 0.78 × 0.94 × 28.07% × 0.89 × 3.20
Dec 31, 2014 43.20% = 0.78 × 0.94 × 27.65% × 0.82 × 2.59
Sep 30, 2014 = × × × × 2.44
Jun 30, 2014 = × × × × 2.36
Mar 31, 2014 = × × × × 2.35

Based on: 10-Q (filing date: 2019-08-02), 10-Q (filing date: 2019-05-03), 10-K (filing date: 2019-02-15), 10-Q (filing date: 2018-11-01), 10-Q (filing date: 2018-08-03), 10-Q (filing date: 2018-05-04), 10-K (filing date: 2018-02-15), 10-Q (filing date: 2017-10-27), 10-Q (filing date: 2017-08-04), 10-Q (filing date: 2017-05-05), 10-K (filing date: 2017-02-10), 10-Q (filing date: 2016-10-28), 10-Q (filing date: 2016-08-04), 10-Q (filing date: 2016-05-06), 10-K (filing date: 2016-02-12), 10-Q (filing date: 2015-10-30), 10-Q (filing date: 2015-08-07), 10-Q (filing date: 2015-05-07), 10-K (filing date: 2015-02-13), 10-Q (filing date: 2014-10-31), 10-Q (filing date: 2014-08-08), 10-Q (filing date: 2014-05-02).

The primary reason for the increase in Return on Equity (ROE) over Q2 2019 is the increase in Financial Leverage.


Two-Way Decomposition of ROA

Illinois Tool Works Inc., decomposition of ROA (quarterly data)

Microsoft Excel LibreOffice Calc
ROA = Net Profit Margin × Asset Turnover
Jun 30, 2019 16.23% = 17.17% × 0.95
Mar 31, 2019 16.36% = 17.21% × 0.95
Dec 31, 2018 17.24% = 17.36% × 0.99
Sep 30, 2018 12.27% = 12.69% × 0.97
Jun 30, 2018 12.12% = 12.70% × 0.95
Mar 31, 2018 11.16% = 12.36% × 0.90
Dec 31, 2017 10.05% = 11.79% × 0.85
Sep 30, 2017 13.91% = 16.12% × 0.86
Jun 30, 2017 13.60% = 15.50% × 0.88
Mar 31, 2017 13.54% = 15.24% × 0.89
Dec 31, 2016 13.39% = 14.96% × 0.89
Sep 30, 2016 12.59% = 14.68% × 0.86
Jun 30, 2016 12.84% = 14.65% × 0.88
Mar 31, 2016 12.37% = 14.31% × 0.86
Dec 31, 2015 12.07% = 14.17% × 0.85
Sep 30, 2015 11.79% = 13.93% × 0.85
Jun 30, 2015 11.74% = 13.73% × 0.85
Mar 31, 2015 18.39% = 20.56% × 0.89
Dec 31, 2014 16.66% = 20.34% × 0.82
Sep 30, 2014 = ×
Jun 30, 2014 = ×
Mar 31, 2014 = ×

Based on: 10-Q (filing date: 2019-08-02), 10-Q (filing date: 2019-05-03), 10-K (filing date: 2019-02-15), 10-Q (filing date: 2018-11-01), 10-Q (filing date: 2018-08-03), 10-Q (filing date: 2018-05-04), 10-K (filing date: 2018-02-15), 10-Q (filing date: 2017-10-27), 10-Q (filing date: 2017-08-04), 10-Q (filing date: 2017-05-05), 10-K (filing date: 2017-02-10), 10-Q (filing date: 2016-10-28), 10-Q (filing date: 2016-08-04), 10-Q (filing date: 2016-05-06), 10-K (filing date: 2016-02-12), 10-Q (filing date: 2015-10-30), 10-Q (filing date: 2015-08-07), 10-Q (filing date: 2015-05-07), 10-K (filing date: 2015-02-13), 10-Q (filing date: 2014-10-31), 10-Q (filing date: 2014-08-08), 10-Q (filing date: 2014-05-02).

The primary reason for the decrease in Return on Assets (ROA) over Q2 2019 is the decrease in Asset Turnover.


Four-Way Decomposition of ROA

Illinois Tool Works Inc., decomposition of ROA (quarterly data)

Microsoft Excel LibreOffice Calc
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Jun 30, 2019 16.23% = 0.75 × 0.93 × 24.46% × 0.95
Mar 31, 2019 16.36% = 0.75 × 0.93 × 24.62% × 0.95
Dec 31, 2018 17.24% = 0.76 × 0.93 × 24.72% × 0.99
Sep 30, 2018 12.27% = 0.56 × 0.93 × 24.53% × 0.97
Jun 30, 2018 12.12% = 0.55 × 0.93 × 25.01% × 0.95
Mar 31, 2018 11.16% = 0.54 × 0.93 × 24.90% × 0.90
Dec 31, 2017 10.05% = 0.52 × 0.93 × 24.66% × 0.85
Sep 30, 2017 13.91% = 0.71 × 0.93 × 24.55% × 0.86
Jun 30, 2017 13.60% = 0.71 × 0.92 × 23.68% × 0.88
Mar 31, 2017 13.54% = 0.70 × 0.92 × 23.43% × 0.89
Dec 31, 2016 13.39% = 0.70 × 0.92 × 23.13% × 0.89
Sep 30, 2016 12.59% = 0.70 × 0.92 × 22.62% × 0.86
Jun 30, 2016 12.84% = 0.70 × 0.92 × 22.58% × 0.88
Mar 31, 2016 12.37% = 0.70 × 0.92 × 22.14% × 0.86
Dec 31, 2015 12.07% = 0.70 × 0.92 × 21.97% × 0.85
Sep 30, 2015 11.79% = 0.70 × 0.92 × 21.66% × 0.85
Jun 30, 2015 11.74% = 0.70 × 0.92 × 21.36% × 0.85
Mar 31, 2015 18.39% = 0.78 × 0.94 × 28.07% × 0.89
Dec 31, 2014 16.66% = 0.78 × 0.94 × 27.65% × 0.82
Sep 30, 2014 = × × ×
Jun 30, 2014 = × × ×
Mar 31, 2014 = × × ×

Based on: 10-Q (filing date: 2019-08-02), 10-Q (filing date: 2019-05-03), 10-K (filing date: 2019-02-15), 10-Q (filing date: 2018-11-01), 10-Q (filing date: 2018-08-03), 10-Q (filing date: 2018-05-04), 10-K (filing date: 2018-02-15), 10-Q (filing date: 2017-10-27), 10-Q (filing date: 2017-08-04), 10-Q (filing date: 2017-05-05), 10-K (filing date: 2017-02-10), 10-Q (filing date: 2016-10-28), 10-Q (filing date: 2016-08-04), 10-Q (filing date: 2016-05-06), 10-K (filing date: 2016-02-12), 10-Q (filing date: 2015-10-30), 10-Q (filing date: 2015-08-07), 10-Q (filing date: 2015-05-07), 10-K (filing date: 2015-02-13), 10-Q (filing date: 2014-10-31), 10-Q (filing date: 2014-08-08), 10-Q (filing date: 2014-05-02).

The primary reason for the decrease in Return on Assets (ROA) over Q2 2019 is the decrease in operating profitability measured by EBIT Margin.


Decomposition of Net Profit Margin

Illinois Tool Works Inc., decomposition of Net Profit Margin (quarterly data)

Microsoft Excel LibreOffice Calc
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Jun 30, 2019 17.17% = 0.75 × 0.93 × 24.46%
Mar 31, 2019 17.21% = 0.75 × 0.93 × 24.62%
Dec 31, 2018 17.36% = 0.76 × 0.93 × 24.72%
Sep 30, 2018 12.69% = 0.56 × 0.93 × 24.53%
Jun 30, 2018 12.70% = 0.55 × 0.93 × 25.01%
Mar 31, 2018 12.36% = 0.54 × 0.93 × 24.90%
Dec 31, 2017 11.79% = 0.52 × 0.93 × 24.66%
Sep 30, 2017 16.12% = 0.71 × 0.93 × 24.55%
Jun 30, 2017 15.50% = 0.71 × 0.92 × 23.68%
Mar 31, 2017 15.24% = 0.70 × 0.92 × 23.43%
Dec 31, 2016 14.96% = 0.70 × 0.92 × 23.13%
Sep 30, 2016 14.68% = 0.70 × 0.92 × 22.62%
Jun 30, 2016 14.65% = 0.70 × 0.92 × 22.58%
Mar 31, 2016 14.31% = 0.70 × 0.92 × 22.14%
Dec 31, 2015 14.17% = 0.70 × 0.92 × 21.97%
Sep 30, 2015 13.93% = 0.70 × 0.92 × 21.66%
Jun 30, 2015 13.73% = 0.70 × 0.92 × 21.36%
Mar 31, 2015 20.56% = 0.78 × 0.94 × 28.07%
Dec 31, 2014 20.34% = 0.78 × 0.94 × 27.65%
Sep 30, 2014 = × ×
Jun 30, 2014 = × ×
Mar 31, 2014 = × ×

Based on: 10-Q (filing date: 2019-08-02), 10-Q (filing date: 2019-05-03), 10-K (filing date: 2019-02-15), 10-Q (filing date: 2018-11-01), 10-Q (filing date: 2018-08-03), 10-Q (filing date: 2018-05-04), 10-K (filing date: 2018-02-15), 10-Q (filing date: 2017-10-27), 10-Q (filing date: 2017-08-04), 10-Q (filing date: 2017-05-05), 10-K (filing date: 2017-02-10), 10-Q (filing date: 2016-10-28), 10-Q (filing date: 2016-08-04), 10-Q (filing date: 2016-05-06), 10-K (filing date: 2016-02-12), 10-Q (filing date: 2015-10-30), 10-Q (filing date: 2015-08-07), 10-Q (filing date: 2015-05-07), 10-K (filing date: 2015-02-13), 10-Q (filing date: 2014-10-31), 10-Q (filing date: 2014-08-08), 10-Q (filing date: 2014-05-02).

The primary reason for the decrease in Net Profit Margin over Q2 2019 is the decrease in operating profitability measured by EBIT Margin.