Microsoft Excel LibreOffice Calc

Illinois Tool Works Inc. (ITW)

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
Quarterly Data

Beginner level

Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.

Two-Component Disaggregation of ROE

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

Microsoft Excel LibreOffice Calc
ROE = ROA × Financial Leverage
Dec 31, 2019 83.31% = 16.73% × 4.98
Sep 30, 2019 83.85% = 16.62% × 5.04
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 — = — × 3.17
Jun 30, 2015 — = — × 3.08
Mar 31, 2015 — = — × 3.20

Based on: 10-K (filing date: 2020-02-14), 10-Q (filing date: 2019-10-28), 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).

The primary reason for the decrease in return on equity ratio (ROE) over Q4 2019 is the decrease in financial leverage ratio.

Three-Component Disaggregation of ROE

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

Microsoft Excel LibreOffice Calc
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Dec 31, 2019 83.31% = 17.87% × 0.94 × 4.98
Sep 30, 2019 83.85% = 17.49% × 0.95 × 5.04
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 — = — × — × 3.17
Jun 30, 2015 — = — × — × 3.08
Mar 31, 2015 — = — × — × 3.20

Based on: 10-K (filing date: 2020-02-14), 10-Q (filing date: 2019-10-28), 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).

The primary reason for the decrease in return on equity ratio (ROE) over Q4 2019 is the decrease in efficiency measured by asset turnover ratio.

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 × Financial Leverage
Dec 31, 2019 83.31% = 0.77 × 0.94 × 24.87% × 0.94 × 4.98
Sep 30, 2019 83.85% = 0.76 × 0.93 × 24.66% × 0.95 × 5.04
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 — = — × — × — × — × 3.17
Jun 30, 2015 — = — × — × — × — × 3.08
Mar 31, 2015 — = — × — × — × — × 3.20

Based on: 10-K (filing date: 2020-02-14), 10-Q (filing date: 2019-10-28), 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).

The primary reason for the decrease in return on equity ratio (ROE) over Q4 2019 is the decrease in efficiency measured by asset turnover ratio.

Two-Component Disaggregation of ROA

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

Microsoft Excel LibreOffice Calc
ROA = Net Profit Margin × Asset Turnover
Dec 31, 2019 16.73% = 17.87% × 0.94
Sep 30, 2019 16.62% = 17.49% × 0.95
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 — = — × —
Jun 30, 2015 — = — × —
Mar 31, 2015 — = — × —

Based on: 10-K (filing date: 2020-02-14), 10-Q (filing date: 2019-10-28), 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).

The primary reason for the increase in return on assets ratio (ROA) over Q4 2019 is the increase in profitability measured by net profit margin ratio.

Four-Component Disaggregation of ROA

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

Microsoft Excel LibreOffice Calc
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Dec 31, 2019 16.73% = 0.77 × 0.94 × 24.87% × 0.94
Sep 30, 2019 16.62% = 0.76 × 0.93 × 24.66% × 0.95
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 — = — × — × — × —
Jun 30, 2015 — = — × — × — × —
Mar 31, 2015 — = — × — × — × —

Based on: 10-K (filing date: 2020-02-14), 10-Q (filing date: 2019-10-28), 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).

The primary reason for the increase in return on assets ratio (ROA) over Q4 2019 is the increase in effect of taxes measured by tax burden ratio.

Disaggregation of Net Profit Margin

Illinois Tool Works Inc., decomposition of net profit margin ratio (quarterly data)

Microsoft Excel LibreOffice Calc
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Dec 31, 2019 17.87% = 0.77 × 0.94 × 24.87%
Sep 30, 2019 17.49% = 0.76 × 0.93 × 24.66%
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 — = — × — × —
Jun 30, 2015 — = — × — × —
Mar 31, 2015 — = — × — × —

Based on: 10-K (filing date: 2020-02-14), 10-Q (filing date: 2019-10-28), 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).

The primary reason for the increase in net profit margin ratio over Q4 2019 is the increase in effect of taxes measured by tax burden ratio.