Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Illinois Tool Works Inc. (NYSE:ITW)

Analysis of Profitability Ratios

Beginner level

Profitability Ratios (Summary)

Illinois Tool Works Inc., profitability ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Return on Sales
Gross profit margin 41.97% 41.74% 41.95% 41.94% 41.16%
Operating profit margin 24.11% 24.27% 24.41% 22.53% 21.39%
Net profit margin 17.87% 17.36% 11.79% 14.96% 14.17%
Return on Investment
Return on equity (ROE) 83.31% 78.76% 36.79% 47.84% 36.35%
Return on assets (ROA) 16.73% 17.24% 10.05% 13.39% 12.07%

Based on: 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12).

Profitability ratio Description The company
Gross profit margin Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. Illinois Tool Works Inc.’s gross profit margin ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Illinois Tool Works Inc.’s operating profit margin ratio deteriorated from 2017 to 2018 and from 2018 to 2019.
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Illinois Tool Works Inc.’s net profit margin ratio improved from 2017 to 2018 and from 2018 to 2019.

Profitability ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders’ equity. Illinois Tool Works Inc.’s ROE improved from 2017 to 2018 and from 2018 to 2019.
ROA A profitability ratio calculated as net income divided by total assets. Illinois Tool Works Inc.’s ROA improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

Gross Profit Margin

Illinois Tool Works Inc., gross profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Gross profit 5,922  6,164  6,005  5,703  5,517 
Operating revenue 14,109  14,768  14,314  13,599  13,405 
Profitability Ratio
Gross profit margin1 41.97% 41.74% 41.95% 41.94% 41.16%
Benchmarks
Gross Profit Margin, Competitors2
Caterpillar Inc. 27.83% 28.61% 27.24% 20.86% 23.57%

Based on: 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12).

1 2019 Calculation
Gross profit margin = 100 × Gross profit ÷ Operating revenue
= 100 × 5,922 ÷ 14,109 = 41.97%

2 Click competitor name to see calculations.

Profitability ratio Description The company
Gross profit margin Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. Illinois Tool Works Inc.’s gross profit margin ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

Operating Profit Margin

Illinois Tool Works Inc., operating profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Operating income 3,402  3,584  3,494  3,064  2,867 
Operating revenue 14,109  14,768  14,314  13,599  13,405 
Profitability Ratio
Operating profit margin1 24.11% 24.27% 24.41% 22.53% 21.39%
Benchmarks
Operating Profit Margin, Competitors2
Caterpillar Inc. 16.33% 16.00% 10.32% 1.39% 7.38%
Operating Profit Margin, Sector
Industrial Engineering 18.03% 17.84% 13.86% 7.21% 10.64%
Operating Profit Margin, Industry
Industrials 13.24% 14.13% 13.94% 12.94% 13.66%

Based on: 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12).

1 2019 Calculation
Operating profit margin = 100 × Operating income ÷ Operating revenue
= 100 × 3,402 ÷ 14,109 = 24.11%

2 Click competitor name to see calculations.

Profitability ratio Description The company
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Illinois Tool Works Inc.’s operating profit margin ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Net Profit Margin

Illinois Tool Works Inc., net profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Net income 2,521  2,563  1,687  2,035  1,899 
Operating revenue 14,109  14,768  14,314  13,599  13,405 
Profitability Ratio
Net profit margin1 17.87% 17.36% 11.79% 14.96% 14.17%
Benchmarks
Net Profit Margin, Competitors2
Caterpillar Inc. 12.00% 11.86% 1.77% -0.19% 4.76%
Net Profit Margin, Sector
Industrial Engineering 13.28% 13.08% 4.28% 3.99% 6.95%
Net Profit Margin, Industry
Industrials 7.42% 6.86% 8.15% 8.73% 7.01%

Based on: 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12).

1 2019 Calculation
Net profit margin = 100 × Net income ÷ Operating revenue
= 100 × 2,521 ÷ 14,109 = 17.87%

2 Click competitor name to see calculations.

Profitability ratio Description The company
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Illinois Tool Works Inc.’s net profit margin ratio improved from 2017 to 2018 and from 2018 to 2019.

Return on Equity (ROE)

Illinois Tool Works Inc., ROE calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Net income 2,521  2,563  1,687  2,035  1,899 
Stockholders’ equity attributable to ITW 3,026  3,254  4,585  4,254  5,224 
Profitability Ratio
ROE1 83.31% 78.76% 36.79% 47.84% 36.35%
Benchmarks
ROE, Competitors2
Caterpillar Inc. 41.77% 43.79% 5.50% -0.51% 14.19%
ROE, Sector
Industrial Engineering 48.90% 50.37% 13.35% 11.32% 19.97%
ROE, Industry
Industrials 25.37% 24.18% 24.04% 25.10% 17.58%

Based on: 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12).

1 2019 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity attributable to ITW
= 100 × 2,521 ÷ 3,026 = 83.31%

2 Click competitor name to see calculations.

Profitability ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders’ equity. Illinois Tool Works Inc.’s ROE improved from 2017 to 2018 and from 2018 to 2019.

Return on Assets (ROA)

Illinois Tool Works Inc., ROA calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Net income 2,521  2,563  1,687  2,035  1,899 
Total assets 15,068  14,870  16,780  15,201  15,729 
Profitability Ratio
ROA1 16.73% 17.24% 10.05% 13.39% 12.07%
Benchmarks
ROA, Competitors2
Caterpillar Inc. 7.77% 7.83% 0.98% -0.09% 2.68%
ROA, Sector
Industrial Engineering 9.21% 9.33% 2.60% 2.19% 4.25%
ROA, Industry
Industrials 4.70% 4.60% 5.10% 5.46% 4.00%

Based on: 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12).

1 2019 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 2,521 ÷ 15,068 = 16.73%

2 Click competitor name to see calculations.

Profitability ratio Description The company
ROA A profitability ratio calculated as net income divided by total assets. Illinois Tool Works Inc.’s ROA improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.