Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Illinois Tool Works Inc., solvency ratios
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | Illinois Tool Works Inc. debt to equity ratio improved from 2019 to 2020 and from 2020 to 2021. |
| Debt to equity ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity. | Illinois Tool Works Inc. debt to equity ratio (including operating lease liability) improved from 2019 to 2020 and from 2020 to 2021. |
| Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | Illinois Tool Works Inc. debt to capital ratio improved from 2019 to 2020 and from 2020 to 2021. |
| Debt to capital ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity. | Illinois Tool Works Inc. debt to capital ratio (including operating lease liability) improved from 2019 to 2020 and from 2020 to 2021. |
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | Illinois Tool Works Inc. debt to assets ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level. |
| Debt to assets ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total assets. | Illinois Tool Works Inc. debt to assets ratio (including operating lease liability) deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level. |
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | Illinois Tool Works Inc. financial leverage ratio decreased from 2019 to 2020 and from 2020 to 2021. |
| Solvency ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Illinois Tool Works Inc. interest coverage ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level. |
| Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | Illinois Tool Works Inc. fixed charge coverage ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level. |
Debt to Equity
Illinois Tool Works Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 778) | 350) | 4) | 1,351) | 850) | |
| Long-term debt | 6,909) | 7,772) | 7,754) | 6,029) | 7,478) | |
| Total debt | 7,687) | 8,122) | 7,758) | 7,380) | 8,328) | |
| Stockholders’ equity attributable to ITW | 3,625) | 3,181) | 3,026) | 3,254) | 4,585) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 2.12 | 2.55 | 2.56 | 2.27 | 1.82 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 2.29 | 2.42 | 2.58 | — | — | |
| Cummins Inc. | 0.49 | 0.52 | 0.32 | — | — | |
| Eaton Corp. plc | 0.52 | 0.54 | 0.52 | — | — | |
| General Electric Co. | 0.87 | 2.11 | 3.21 | — | — | |
| Honeywell International Inc. | 1.06 | 1.28 | 0.87 | — | — | |
| Lockheed Martin Corp. | 1.07 | 2.02 | 4.05 | — | — | |
| RTX Corp. | 0.43 | 0.44 | 1.04 | — | — | |
| Debt to Equity, Sector | ||||||
| Capital Goods | 1.22 | 1.68 | 1.97 | — | — | |
| Debt to Equity, Industry | ||||||
| Industrials | 1.22 | 1.68 | 1.79 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity attributable to ITW
= 7,687 ÷ 3,625 = 2.12
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | Illinois Tool Works Inc. debt to equity ratio improved from 2019 to 2020 and from 2020 to 2021. |
Debt to Equity (including Operating Lease Liability)
Illinois Tool Works Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 778) | 350) | 4) | 1,351) | 850) | |
| Long-term debt | 6,909) | 7,772) | 7,754) | 6,029) | 7,478) | |
| Total debt | 7,687) | 8,122) | 7,758) | 7,380) | 8,328) | |
| Current portion of operating lease liabilities | 61) | 55) | 51) | —) | —) | |
| Long-term portion of operating lease liabilities | 133) | 133) | 128) | —) | —) | |
| Total debt (including operating lease liability) | 7,881) | 8,310) | 7,937) | 7,380) | 8,328) | |
| Stockholders’ equity attributable to ITW | 3,625) | 3,181) | 3,026) | 3,254) | 4,585) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 2.17 | 2.61 | 2.62 | 2.27 | 1.82 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 2.33 | 2.46 | 2.62 | — | — | |
| Cummins Inc. | 0.54 | 0.57 | 0.38 | — | — | |
| Eaton Corp. plc | 0.55 | 0.57 | 0.55 | — | — | |
| General Electric Co. | 0.94 | 2.20 | 3.32 | — | — | |
| Honeywell International Inc. | 1.11 | 1.32 | 0.90 | — | — | |
| Lockheed Martin Corp. | 1.19 | 2.21 | 4.40 | — | — | |
| RTX Corp. | 0.46 | 0.47 | 1.11 | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Capital Goods | 1.28 | 1.75 | 2.06 | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Industrials | 1.36 | 1.83 | 1.89 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity attributable to ITW
= 7,881 ÷ 3,625 = 2.17
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity. | Illinois Tool Works Inc. debt to equity ratio (including operating lease liability) improved from 2019 to 2020 and from 2020 to 2021. |
Debt to Capital
Illinois Tool Works Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 778) | 350) | 4) | 1,351) | 850) | |
| Long-term debt | 6,909) | 7,772) | 7,754) | 6,029) | 7,478) | |
| Total debt | 7,687) | 8,122) | 7,758) | 7,380) | 8,328) | |
| Stockholders’ equity attributable to ITW | 3,625) | 3,181) | 3,026) | 3,254) | 4,585) | |
| Total capital | 11,312) | 11,303) | 10,784) | 10,634) | 12,913) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.68 | 0.72 | 0.72 | 0.69 | 0.64 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Boeing Co. | 1.35 | 1.40 | 1.46 | — | — | |
| Caterpillar Inc. | 0.70 | 0.71 | 0.72 | — | — | |
| Cummins Inc. | 0.33 | 0.34 | 0.24 | — | — | |
| Eaton Corp. plc | 0.34 | 0.35 | 0.34 | — | — | |
| General Electric Co. | 0.47 | 0.68 | 0.76 | — | — | |
| Honeywell International Inc. | 0.51 | 0.56 | 0.46 | — | — | |
| Lockheed Martin Corp. | 0.52 | 0.67 | 0.80 | — | — | |
| RTX Corp. | 0.30 | 0.31 | 0.51 | — | — | |
| Debt to Capital, Sector | ||||||
| Capital Goods | 0.55 | 0.63 | 0.66 | — | — | |
| Debt to Capital, Industry | ||||||
| Industrials | 0.55 | 0.63 | 0.64 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital = Total debt ÷ Total capital
= 7,687 ÷ 11,312 = 0.68
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | Illinois Tool Works Inc. debt to capital ratio improved from 2019 to 2020 and from 2020 to 2021. |
Debt to Capital (including Operating Lease Liability)
Illinois Tool Works Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 778) | 350) | 4) | 1,351) | 850) | |
| Long-term debt | 6,909) | 7,772) | 7,754) | 6,029) | 7,478) | |
| Total debt | 7,687) | 8,122) | 7,758) | 7,380) | 8,328) | |
| Current portion of operating lease liabilities | 61) | 55) | 51) | —) | —) | |
| Long-term portion of operating lease liabilities | 133) | 133) | 128) | —) | —) | |
| Total debt (including operating lease liability) | 7,881) | 8,310) | 7,937) | 7,380) | 8,328) | |
| Stockholders’ equity attributable to ITW | 3,625) | 3,181) | 3,026) | 3,254) | 4,585) | |
| Total capital (including operating lease liability) | 11,506) | 11,491) | 10,963) | 10,634) | 12,913) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.68 | 0.72 | 0.72 | 0.69 | 0.64 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | 1.34 | 1.39 | 1.43 | — | — | |
| Caterpillar Inc. | 0.70 | 0.71 | 0.72 | — | — | |
| Cummins Inc. | 0.35 | 0.36 | 0.28 | — | — | |
| Eaton Corp. plc | 0.36 | 0.36 | 0.35 | — | — | |
| General Electric Co. | 0.49 | 0.69 | 0.77 | — | — | |
| Honeywell International Inc. | 0.53 | 0.57 | 0.47 | — | — | |
| Lockheed Martin Corp. | 0.54 | 0.69 | 0.81 | — | — | |
| RTX Corp. | 0.31 | 0.32 | 0.53 | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Capital Goods | 0.56 | 0.64 | 0.67 | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.58 | 0.65 | 0.65 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 7,881 ÷ 11,506 = 0.68
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to capital ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity. | Illinois Tool Works Inc. debt to capital ratio (including operating lease liability) improved from 2019 to 2020 and from 2020 to 2021. |
Debt to Assets
Illinois Tool Works Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 778) | 350) | 4) | 1,351) | 850) | |
| Long-term debt | 6,909) | 7,772) | 7,754) | 6,029) | 7,478) | |
| Total debt | 7,687) | 8,122) | 7,758) | 7,380) | 8,328) | |
| Total assets | 16,077) | 15,612) | 15,068) | 14,870) | 16,780) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.48 | 0.52 | 0.51 | 0.50 | 0.50 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Boeing Co. | 0.42 | 0.42 | 0.20 | — | — | |
| Caterpillar Inc. | 0.46 | 0.47 | 0.48 | — | — | |
| Cummins Inc. | 0.18 | 0.18 | 0.12 | — | — | |
| Eaton Corp. plc | 0.25 | 0.25 | 0.25 | — | — | |
| General Electric Co. | 0.18 | 0.30 | 0.34 | — | — | |
| Honeywell International Inc. | 0.30 | 0.35 | 0.27 | — | — | |
| Lockheed Martin Corp. | 0.23 | 0.24 | 0.27 | — | — | |
| RTX Corp. | 0.20 | 0.20 | 0.31 | — | — | |
| Debt to Assets, Sector | ||||||
| Capital Goods | 0.27 | 0.31 | 0.31 | — | — | |
| Debt to Assets, Industry | ||||||
| Industrials | 0.29 | 0.32 | 0.32 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets = Total debt ÷ Total assets
= 7,687 ÷ 16,077 = 0.48
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | Illinois Tool Works Inc. debt to assets ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level. |
Debt to Assets (including Operating Lease Liability)
Illinois Tool Works Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 778) | 350) | 4) | 1,351) | 850) | |
| Long-term debt | 6,909) | 7,772) | 7,754) | 6,029) | 7,478) | |
| Total debt | 7,687) | 8,122) | 7,758) | 7,380) | 8,328) | |
| Current portion of operating lease liabilities | 61) | 55) | 51) | —) | —) | |
| Long-term portion of operating lease liabilities | 133) | 133) | 128) | —) | —) | |
| Total debt (including operating lease liability) | 7,881) | 8,310) | 7,937) | 7,380) | 8,328) | |
| Total assets | 16,077) | 15,612) | 15,068) | 14,870) | 16,780) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.49 | 0.53 | 0.53 | 0.50 | 0.50 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | 0.43 | 0.43 | 0.21 | — | — | |
| Caterpillar Inc. | 0.46 | 0.48 | 0.49 | — | — | |
| Cummins Inc. | 0.19 | 0.20 | 0.15 | — | — | |
| Eaton Corp. plc | 0.27 | 0.27 | 0.27 | — | — | |
| General Electric Co. | 0.19 | 0.31 | 0.35 | — | — | |
| Honeywell International Inc. | 0.32 | 0.36 | 0.28 | — | — | |
| Lockheed Martin Corp. | 0.26 | 0.26 | 0.29 | — | — | |
| RTX Corp. | 0.21 | 0.21 | 0.33 | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Capital Goods | 0.29 | 0.32 | 0.32 | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.32 | 0.35 | 0.34 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 7,881 ÷ 16,077 = 0.49
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to assets ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total assets. | Illinois Tool Works Inc. debt to assets ratio (including operating lease liability) deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level. |
Financial Leverage
Illinois Tool Works Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 16,077) | 15,612) | 15,068) | 14,870) | 16,780) | |
| Stockholders’ equity attributable to ITW | 3,625) | 3,181) | 3,026) | 3,254) | 4,585) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 4.44 | 4.91 | 4.98 | 4.57 | 3.66 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 5.02 | 5.11 | 5.38 | — | — | |
| Cummins Inc. | 2.80 | 2.81 | 2.63 | — | — | |
| Eaton Corp. plc | 2.07 | 2.13 | 2.04 | — | — | |
| General Electric Co. | 4.93 | 7.13 | 9.40 | — | — | |
| Honeywell International Inc. | 3.47 | 3.68 | 3.17 | — | — | |
| Lockheed Martin Corp. | 4.64 | 8.43 | 15.20 | — | — | |
| RTX Corp. | 2.21 | 2.25 | 3.34 | — | — | |
| Financial Leverage, Sector | ||||||
| Capital Goods | 4.46 | 5.39 | 6.40 | — | — | |
| Financial Leverage, Industry | ||||||
| Industrials | 4.27 | 5.25 | 5.63 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity attributable to ITW
= 16,077 ÷ 3,625 = 4.44
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | Illinois Tool Works Inc. financial leverage ratio decreased from 2019 to 2020 and from 2020 to 2021. |
Interest Coverage
Illinois Tool Works Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 2,694) | 2,109) | 2,521) | 2,563) | 1,687) | |
| Add: Income tax expense | 632) | 595) | 767) | 831) | 1,583) | |
| Add: Interest expense | 202) | 206) | 221) | 257) | 260) | |
| Earnings before interest and tax (EBIT) | 3,528) | 2,910) | 3,509) | 3,651) | 3,530) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 17.47 | 14.13 | 15.88 | 14.21 | 13.58 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Boeing Co. | -0.88 | -5.71 | -2.19 | — | — | |
| Caterpillar Inc. | 17.88 | 8.80 | 19.62 | — | — | |
| Cummins Inc. | 25.78 | 24.38 | 27.00 | — | — | |
| Eaton Corp. plc | 21.11 | 12.72 | 11.98 | — | — | |
| General Electric Co. | -0.96 | 2.59 | 1.27 | — | — | |
| Honeywell International Inc. | 22.09 | 17.75 | 22.17 | — | — | |
| Lockheed Martin Corp. | 14.27 | 14.93 | 12.09 | — | — | |
| RTX Corp. | 4.71 | -0.65 | 5.65 | — | — | |
| Interest Coverage, Sector | ||||||
| Capital Goods | 4.30 | 2.25 | 5.14 | — | — | |
| Interest Coverage, Industry | ||||||
| Industrials | 6.21 | 2.23 | 4.59 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Interest coverage = EBIT ÷ Interest expense
= 3,528 ÷ 202 = 17.47
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Illinois Tool Works Inc. interest coverage ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level. |
Fixed Charge Coverage
Illinois Tool Works Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 2,694) | 2,109) | 2,521) | 2,563) | 1,687) | |
| Add: Income tax expense | 632) | 595) | 767) | 831) | 1,583) | |
| Add: Interest expense | 202) | 206) | 221) | 257) | 260) | |
| Earnings before interest and tax (EBIT) | 3,528) | 2,910) | 3,509) | 3,651) | 3,530) | |
| Add: Rental expense for operating leases | 118) | 113) | 113) | 124) | 120) | |
| Earnings before fixed charges and tax | 3,646) | 3,023) | 3,622) | 3,775) | 3,650) | |
| Interest expense | 202) | 206) | 221) | 257) | 260) | |
| Rental expense for operating leases | 118) | 113) | 113) | 124) | 120) | |
| Fixed charges | 320) | 319) | 334) | 381) | 380) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 11.39 | 9.48 | 10.84 | 9.91 | 9.61 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Boeing Co. | -0.64 | -4.75 | -1.19 | — | — | |
| Caterpillar Inc. | 12.73 | 6.58 | 13.01 | — | — | |
| Cummins Inc. | 10.72 | 9.60 | 9.94 | — | — | |
| Eaton Corp. plc | 10.40 | 6.24 | 7.45 | — | — | |
| General Electric Co. | -0.22 | 1.93 | 1.09 | — | — | |
| Honeywell International Inc. | 13.67 | 11.49 | 14.06 | — | — | |
| Lockheed Martin Corp. | 9.95 | 11.12 | 9.12 | — | — | |
| RTX Corp. | 3.66 | -0.22 | 4.31 | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Capital Goods | 3.26 | 1.84 | 3.80 | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Industrials | 4.04 | 1.71 | 3.07 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 3,646 ÷ 320 = 11.39
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | Illinois Tool Works Inc. fixed charge coverage ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level. |