Analysis of Long-term (Investment) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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- Cash Flow Statement
- Common-Size Balance Sheet: Assets
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Selected Financial Data since 2005
- Return on Equity (ROE) since 2005
- Return on Assets (ROA) since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Sales (P/S) since 2005
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Long-term Activity Ratios (Summary)
Illinois Tool Works Inc., long-term (investment) activity ratios (quarterly data)
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio demonstrated relative stability throughout the observed periods, with values generally fluctuating between approximately 7.0 and 8.4. From March 2017 through March 2019, the ratio maintained levels above 8.0, indicating efficient utilization of fixed assets to generate sales. However, a noticeable decline began around mid-2019, reaching a low point near 7.08 in September 2020. The ratio subsequently showed a recovery trend towards the end of 2021, closing the year slightly below 8.0. This pattern suggests temporary challenges or reductions in asset efficiency during 2019-2020, followed by gradual improvement.
- Total Asset Turnover
- The total asset turnover ratio exhibited an ascending trend from early 2017 up to late 2018, increasing from 0.85 to a peak of approximately 0.99, indicating improved overall asset efficiency in generating revenue. This performance then stabilized around 0.95 during 2019, before experiencing a decline through 2020, bottoming out near 0.81 by the end of that year. In 2021, the ratio rebounded moderately, approaching 0.90 but not returning to prior peak levels. This trajectory points to a period of reduced asset utilization efficiency during 2020, with signs of recovery in the subsequent year.
- Equity Turnover
- The equity turnover ratio showed a consistent upward trajectory from early 2017, rising steadily from 3.12 to a peak of 6.04 in March 2020. This substantial increase reflects an enhanced ability to generate revenue relative to shareholders' equity, perhaps driven by operational leverage or changes in capital structure. After March 2020, the ratio decreased noticeably over the remaining periods, settling around values close to 4.0 by the end of 2021. This decline may correspond with shifts in equity levels or variations in revenue generation efficiency following the peak. Overall, the equity turnover ratio highlighted significant volatility, with strong growth up to early 2020 and subsequent moderation thereafter.
Net Fixed Asset Turnover
Illinois Tool Works Inc., net fixed asset turnover calculation (quarterly data)
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Operating revenue | ||||||||||||||||||||||||||
| Net plant and equipment | ||||||||||||||||||||||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||||
| Net fixed asset turnover1 | ||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||||||||||||||||||||||
| Boeing Co. | ||||||||||||||||||||||||||
| Caterpillar Inc. | ||||||||||||||||||||||||||
| Eaton Corp. plc | ||||||||||||||||||||||||||
| GE Aerospace | ||||||||||||||||||||||||||
| Honeywell International Inc. | ||||||||||||||||||||||||||
| Lockheed Martin Corp. | ||||||||||||||||||||||||||
| RTX Corp. | ||||||||||||||||||||||||||
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q4 2021 Calculation
Net fixed asset turnover
= (Operating revenueQ4 2021
+ Operating revenueQ3 2021
+ Operating revenueQ2 2021
+ Operating revenueQ1 2021)
÷ Net plant and equipment
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Operating Revenue Trends
- Operating revenue displays a generally fluctuating pattern over the examined periods. From March 2017 to December 2017, revenue gradually increased from 3,471 million US dollars to 3,629 million US dollars. This upward momentum continued into mid-2018, peaking around 3,831 million US dollars in June 2018. However, the latter half of 2018 saw a decline, with revenue dropping back to approximately 3,580 million US dollars by December 2018.
- In 2019, revenue remained relatively stable but slightly declined over the year, ending at 3,469 million US dollars in December 2019. The year 2020 marks a notable disruption, likely influenced by external adverse conditions, with revenue sharply decreasing to a low of 2,564 million US dollars in June 2020. Subsequently, a recovery trend is observable, with revenues rising back to 3,679 million US dollars by December 2021, nearly returning to pre-2020 levels.
- Net Plant and Equipment Analysis
- Net plant and equipment values maintain relative stability throughout the periods, oscillating between approximately 1,674 million and 1,809 million US dollars. An initial gradual increase is observed from March 2017 through March 2018, after which values fluctuate modestly without any strong directional trend. Notable is the slight decline during mid-2019 through mid-2020, possibly reflecting reduced capital expenditure or asset disposals during that time frame. A mild upward trend resumes into late 2021, with asset values approaching historical highs.
- Net Fixed Asset Turnover Patterns
- The net fixed asset turnover ratio, available from September 2017 onwards, indicates the efficiency of utilized fixed assets in generating revenue. The ratio starts strong at 8.05 and generally remains between 7.99 and 8.40 through 2019, signifying steady operational efficiency. However, a decreasing trend initiates in 2020, coinciding with reduced revenues and potential operational challenges, reaching a low of 7.08 in December 2020.
- Following this dip, the ratio gradually recovers in 2021, moving back up toward previous levels and ending near 7.99 in December 2021. This rebound suggests a restoration of asset utilization effectiveness, aligning with the improvement in revenue during the same period.
- Overall Observations
- The data reflects a stable operational and asset base with cyclical revenue performance typically influenced by broader economic or market factors. The sharp revenue decline in 2020, accompanied by a dip in asset turnover, signals a significant but temporary operational impact. Recovery through late 2020 and 2021 highlights resilience and effective management of plant and equipment to regain productive efficiency and revenue generation capability.
Total Asset Turnover
Illinois Tool Works Inc., total asset turnover calculation (quarterly data)
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Operating revenue | ||||||||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||||
| Total asset turnover1 | ||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||
| Total Asset Turnover, Competitors2 | ||||||||||||||||||||||||||
| Boeing Co. | ||||||||||||||||||||||||||
| Caterpillar Inc. | ||||||||||||||||||||||||||
| Eaton Corp. plc | ||||||||||||||||||||||||||
| GE Aerospace | ||||||||||||||||||||||||||
| Honeywell International Inc. | ||||||||||||||||||||||||||
| Lockheed Martin Corp. | ||||||||||||||||||||||||||
| RTX Corp. | ||||||||||||||||||||||||||
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q4 2021 Calculation
Total asset turnover
= (Operating revenueQ4 2021
+ Operating revenueQ3 2021
+ Operating revenueQ2 2021
+ Operating revenueQ1 2021)
÷ Total assets
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Operating Revenue
- The operating revenue demonstrates a generally stable pattern from March 2017 through December 2019, fluctuating modestly between approximately $3,469 million and $3,831 million. A notable decline occurs starting in the first quarter of 2020, with revenue dropping sharply to $3,228 million and reaching a trough of $2,564 million in the second quarter of 2020. Subsequently, revenue shows a steady recovery through the second half of 2020 and 2021, regaining pre-2020 levels by the end of 2021, with values around $3,556 million to $3,679 million. This trend suggests an external impact in early 2020 followed by a gradual normalization.
- Total Assets
- Total assets display a gradual increasing trend from March 2017 to December 2017, peaking near $16,780 million. Thereafter, there is a slight decline and some volatility through 2018 and 2019, with values generally ranging from $14,870 million to $15,326 million. During 2020, asset values drop to a low of approximately $14,149 million in the first quarter but then recover and increase steadily through 2021, reaching a high point of $16,077 million in the final quarter. This pattern suggests some asset reduction or divestment actions were taken in early 2020, followed by asset growth in 2021.
- Total Asset Turnover
- Total asset turnover ratios, available from September 2017 onward, show an improvement starting at 0.85 in late 2017, rising to a peak of approximately 0.99 by December 2018. Following this peak, the ratio gradually declines through 2020, falling to 0.84 by September 2020. In 2021, the ratio improves again, stabilizing around 0.9 by the end of the year of 2021. This indicates relatively efficient use of assets during 2018, some efficiency loss in 2020, and partial recovery in asset utilization efficiency in 2021.
- Summary
- The data reveals that operating revenue and total assets experienced notable disruption starting in early 2020, likely due to external factors impacting the business environment. Both metrics hit lows early in 2020 but subsequently demonstrate recovery through 2021. Total asset turnover ratios mirror this pattern, with peak efficiency before the downturn in 2020, a decline during the downturn, and a gradual return toward previous levels by the end of 2021. Overall, the company appears to have managed through a challenging period, regaining operational and asset efficiency by mid to late 2021.
Equity Turnover
Illinois Tool Works Inc., equity turnover calculation (quarterly data)
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Operating revenue | ||||||||||||||||||||||||||
| Stockholders’ equity attributable to ITW | ||||||||||||||||||||||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||||
| Equity turnover1 | ||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||
| Equity Turnover, Competitors2 | ||||||||||||||||||||||||||
| Boeing Co. | ||||||||||||||||||||||||||
| Caterpillar Inc. | ||||||||||||||||||||||||||
| Eaton Corp. plc | ||||||||||||||||||||||||||
| GE Aerospace | ||||||||||||||||||||||||||
| Honeywell International Inc. | ||||||||||||||||||||||||||
| Lockheed Martin Corp. | ||||||||||||||||||||||||||
| RTX Corp. | ||||||||||||||||||||||||||
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q4 2021 Calculation
Equity turnover
= (Operating revenueQ4 2021
+ Operating revenueQ3 2021
+ Operating revenueQ2 2021
+ Operating revenueQ1 2021)
÷ Stockholders’ equity attributable to ITW
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The financial data reveals distinct patterns and trends in operating revenue, stockholders' equity, and equity turnover over the examined periods. These trends provide insights into the company's operational performance and financial structure across multiple fiscal quarters.
- Operating Revenue
- Operating revenue demonstrates a generally stable but slightly fluctuating trend from March 2017 through December 2021. Initial values begin at approximately 3.47 billion USD and peak at 3.83 billion USD in mid-2018, followed by a gradual decrease toward the end of 2018. The revenue continues to oscillate around 3.5 to 3.6 billion USD through 2019. A noticeable decline occurs in the first half of 2020, dropping to 2.56 billion USD, likely reflecting external adverse factors. Subsequent recovery is evident through the latter half of 2020 and into 2021, with revenues rising back toward and slightly above previous stable levels, culminating near 3.68 billion USD by the last quarter of 2021.
- Stockholders’ Equity Attributable to ITW
- Stockholders' equity displays an overall declining trajectory from early 2017 to mid-2020, starting around 4.5 billion USD and falling to approximately 2.28 billion USD by the second quarter of 2020. This decline seems consistent and noteworthy over this period, indicating potential challenges or significant balance sheet changes. Following this low point, equity begins to recover, increasing steadily throughout the remainder of 2020 and into 2021, reaching approximately 3.62 billion USD by the final reporting date. Despite the recovery, equity at the end of 2021 remains below the levels observed in early 2017.
- Equity Turnover
- The equity turnover ratio, available only from the end of 2017 onward, reveals an upward trend from 3.12 to a peak of 6.04 by the first half of 2020, indicating an increased efficiency in generating revenue relative to shareholder equity. This rise likely reflects operational adjustments or shifts in capital structure during the noted timeframe. After this peak, the ratio decreases to around 3.95–4.08 across the 2020 and 2021 periods, suggesting a normalization toward historical levels, coinciding with both the equity recovery and stabilization of revenue.
Collectively, these data points suggest that the company experienced significant downward pressure on both equity and revenue during early 2020, with a subsequent rebound in the latter part of the year and into 2021. The high equity turnover ratio during early 2020 reflects heightened asset utilization or decreased equity base, followed by a moderating trend as conditions stabilized.