Stock Analysis on Net
Stock Analysis on Net

Illinois Tool Works Inc. (NYSE:ITW)

Analysis of Short-term (Operating) Activity Ratios

Microsoft Excel LibreOffice Calc

Short-term Activity Ratios (Summary)

Illinois Tool Works Inc., short-term (operating) activity ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Turnover Ratios
Inventory turnover 6.20 7.03 6.53 6.81 7.34
Receivables turnover 5.02 5.73 5.63 5.45 5.77
Payables turnover 13.81 17.35 16.42 14.08 15.45
Working capital turnover 3.20 3.44 6.60 3.39 4.04
Average No. Days
Average inventory processing period 59 52 56 54 50
Add: Average receivable collection period 73 64 65 67 63
Operating cycle 132 116 121 121 113
Less: Average payables payment period 26 21 22 26 24
Cash conversion cycle 106 95 99 95 89

Based on: 10-K (filing date: 2021-02-12), 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).

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Illinois Tool Works Inc.’s inventory turnover ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
Receivables turnover An activity ratio equal to revenue divided by receivables. Illinois Tool Works Inc.’s receivables turnover ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Illinois Tool Works Inc.’s payables turnover ratio increased from 2018 to 2019 but then decreased significantly from 2019 to 2020.
Working capital turnover An activity ratio calculated as revenue divided by working capital. Illinois Tool Works Inc.’s working capital turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020.

Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Illinois Tool Works Inc.’s number of days of inventory outstanding improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Illinois Tool Works Inc.’s number of days of receivables outstanding improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
Operating cycle Equal to average inventory processing period plus average receivables collection period. Illinois Tool Works Inc.’s operating cycle improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Illinois Tool Works Inc.’s number of days of payables outstanding decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Illinois Tool Works Inc.’s cash conversion cycle improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Inventory Turnover

Illinois Tool Works Inc., inventory turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Cost of revenue 7,375  8,187  8,604  8,309  7,896 
Inventories 1,189  1,164  1,318  1,220  1,076 
Short-term Activity Ratio
Inventory turnover1 6.20 7.03 6.53 6.81 7.34
Benchmarks
Inventory Turnover, Competitors2
3M Co. 3.92 4.15 3.82 3.97 4.44
Boeing Co. 0.78 0.94 1.30 1.71 1.87
Caterpillar Inc. 2.55 3.25 3.21 3.10 3.29
General Electric Co. 3.80 4.74 4.81 4.19 3.91
Honeywell International Inc. 4.94 5.51 6.71 5.98 6.22
Lockheed Martin Corp. 16.01 14.22 15.51 10.14 9.03
Raytheon Technologies Corp. 5.11 5.21 4.96 4.45 4.76
Inventory Turnover, Sector
Capital Goods 2.31 2.64 3.11 3.39 3.43
Inventory Turnover, Industry
Industrials 2.76 3.10 3.59 3.86 3.84

Based on: 10-K (filing date: 2021-02-12), 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).

1 2020 Calculation
Inventory turnover = Cost of revenue ÷ Inventories
= 7,375 ÷ 1,189 = 6.20

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Illinois Tool Works Inc.’s inventory turnover ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Receivables Turnover

Illinois Tool Works Inc., receivables turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Operating revenue 12,574  14,109  14,768  14,314  13,599 
Trade receivables 2,506  2,461  2,622  2,628  2,357 
Short-term Activity Ratio
Receivables turnover1 5.02 5.73 5.63 5.45 5.77
Benchmarks
Receivables Turnover, Competitors2
3M Co. 6.84 6.71 6.53 6.45 6.86
Boeing Co. 29.75 23.44 26.07 8.88 10.71
Caterpillar Inc. 5.33 5.92 5.89 5.74 5.98
General Electric Co. 4.37 5.22 5.71 4.63 4.59
Honeywell International Inc. 4.78 4.90 5.57 4.57 4.81
Lockheed Martin Corp. 33.06 25.59 22.00 5.93 5.76
Raytheon Technologies Corp. 6.11 5.70 4.66 4.75 4.99
Receivables Turnover, Sector
Capital Goods 7.21 7.34 7.39 5.58 5.83
Receivables Turnover, Industry
Industrials 7.47 7.67 7.71 6.21 6.37

Based on: 10-K (filing date: 2021-02-12), 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).

1 2020 Calculation
Receivables turnover = Operating revenue ÷ Trade receivables
= 12,574 ÷ 2,506 = 5.02

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Illinois Tool Works Inc.’s receivables turnover ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Payables Turnover

Illinois Tool Works Inc., payables turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Cost of revenue 7,375  8,187  8,604  8,309  7,896 
Accounts payable 534  472  524  590  511 
Short-term Activity Ratio
Payables turnover1 13.81 17.35 16.42 14.08 15.45
Benchmarks
Payables Turnover, Competitors2
3M Co. 6.48 7.69 7.36 8.23 8.36
Boeing Co. 4.94 4.63 6.30 6.23 7.21
Caterpillar Inc. 4.75 6.15 5.25 4.79 6.14
General Electric Co. 3.67 4.20 5.40 6.07 6.06
Honeywell International Inc. 3.86 4.25 5.18 4.19 4.77
Lockheed Martin Corp. 64.48 40.16 19.35 31.02 25.52
Raytheon Technologies Corp. 5.56 5.28 4.51 4.59 5.54
Payables Turnover, Sector
Capital Goods 5.65 5.76 6.13 6.30 6.97
Payables Turnover, Industry
Industrials 5.52 5.63 5.96 6.12 6.63

Based on: 10-K (filing date: 2021-02-12), 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).

1 2020 Calculation
Payables turnover = Cost of revenue ÷ Accounts payable
= 7,375 ÷ 534 = 13.81

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Illinois Tool Works Inc.’s payables turnover ratio increased from 2018 to 2019 but then decreased significantly from 2019 to 2020.

Working Capital Turnover

Illinois Tool Works Inc., working capital turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Current assets 6,523  6,253  5,778  7,278  6,123 
Less: Current liabilities 2,589  2,154  3,542  3,053  2,760 
Working capital 3,934  4,099  2,236  4,225  3,363 
 
Operating revenue 12,574  14,109  14,768  14,314  13,599 
Short-term Activity Ratio
Working capital turnover1 3.20 3.44 6.60 3.39 4.04
Benchmarks
Working Capital Turnover, Competitors2
3M Co. 4.58 8.57 5.07 4.80 5.47
Boeing Co. 1.69 15.57 16.21 10.50 7.66
Caterpillar Inc. 2.84 4.04 4.99 4.58 6.13
General Electric Co. 2.26 7.03 19.33 8.59 8.09
Honeywell International Inc. 3.64 5.92 7.69 5.68 5.84
Lockheed Martin Corp. 12.01 19.15 31.53 10.58 18.41
Raytheon Technologies Corp. 7.52 26.47 16.08 7.07 8.62
Working Capital Turnover, Sector
Capital Goods 3.26 8.69 11.21 7.13 7.56
Working Capital Turnover, Industry
Industrials 4.62 10.85 14.26 9.11 9.48

Based on: 10-K (filing date: 2021-02-12), 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).

1 2020 Calculation
Working capital turnover = Operating revenue ÷ Working capital
= 12,574 ÷ 3,934 = 3.20

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. Illinois Tool Works Inc.’s working capital turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020.

Average Inventory Processing Period

Illinois Tool Works Inc., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data
Inventory turnover 6.20 7.03 6.53 6.81 7.34
Short-term Activity Ratio (no. days)
Average inventory processing period1 59 52 56 54 50
Benchmarks (no. days)
Average Inventory Processing Period, Competitors2
3M Co. 93 88 96 92 82
Boeing Co. 467 388 280 213 195
Caterpillar Inc. 143 112 114 118 111
General Electric Co. 96 77 76 87 93
Honeywell International Inc. 74 66 54 61 59
Lockheed Martin Corp. 23 26 24 36 40
Raytheon Technologies Corp. 71 70 74 82 77
Average Inventory Processing Period, Sector
Capital Goods 158 138 117 108 107
Average Inventory Processing Period, Industry
Industrials 132 118 102 95 95

Based on: 10-K (filing date: 2021-02-12), 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).

1 2020 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 6.20 = 59

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Illinois Tool Works Inc.’s number of days of inventory outstanding improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Average Receivable Collection Period

Illinois Tool Works Inc., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data
Receivables turnover 5.02 5.73 5.63 5.45 5.77
Short-term Activity Ratio (no. days)
Average receivable collection period1 73 64 65 67 63
Benchmarks (no. days)
Average Receivable Collection Period, Competitors2
3M Co. 53 54 56 57 53
Boeing Co. 12 16 14 41 34
Caterpillar Inc. 68 62 62 64 61
General Electric Co. 83 70 64 79 80
Honeywell International Inc. 76 75 66 80 76
Lockheed Martin Corp. 11 14 17 62 63
Raytheon Technologies Corp. 60 64 78 77 73
Average Receivable Collection Period, Sector
Capital Goods 51 50 49 65 63
Average Receivable Collection Period, Industry
Industrials 49 48 47 59 57

Based on: 10-K (filing date: 2021-02-12), 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).

1 2020 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 5.02 = 73

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Illinois Tool Works Inc.’s number of days of receivables outstanding improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Operating Cycle

Illinois Tool Works Inc., operating cycle calculation, comparison to benchmarks

No. days

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data
Average inventory processing period 59 52 56 54 50
Average receivable collection period 73 64 65 67 63
Short-term Activity Ratio
Operating cycle1 132 116 121 121 113
Benchmarks
Operating Cycle, Competitors2
3M Co. 146 142 152 149 135
Boeing Co. 479 404 294 254 229
Caterpillar Inc. 211 174 176 182 172
General Electric Co. 179 147 140 166 173
Honeywell International Inc. 150 141 120 141 135
Lockheed Martin Corp. 34 40 41 98 103
Raytheon Technologies Corp. 131 134 152 159 150
Operating Cycle, Sector
Capital Goods 209 188 166 173 170
Operating Cycle, Industry
Industrials 181 166 149 154 152

Based on: 10-K (filing date: 2021-02-12), 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).

1 2020 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 59 + 73 = 132

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. Illinois Tool Works Inc.’s operating cycle improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Average Payables Payment Period

Illinois Tool Works Inc., average payables payment period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data
Payables turnover 13.81 17.35 16.42 14.08 15.45
Short-term Activity Ratio (no. days)
Average payables payment period1 26 21 22 26 24
Benchmarks (no. days)
Average Payables Payment Period, Competitors2
3M Co. 56 47 50 44 44
Boeing Co. 74 79 58 59 51
Caterpillar Inc. 77 59 70 76 59
General Electric Co. 100 87 68 60 60
Honeywell International Inc. 95 86 70 87 76
Lockheed Martin Corp. 6 9 19 12 14
Raytheon Technologies Corp. 66 69 81 80 66
Average Payables Payment Period, Sector
Capital Goods 65 63 60 58 52
Average Payables Payment Period, Industry
Industrials 66 65 61 60 55

Based on: 10-K (filing date: 2021-02-12), 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).

1 2020 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 13.81 = 26

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Illinois Tool Works Inc.’s number of days of payables outstanding decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.

Cash Conversion Cycle

Illinois Tool Works Inc., cash conversion cycle calculation, comparison to benchmarks

No. days

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data
Average inventory processing period 59 52 56 54 50
Average receivable collection period 73 64 65 67 63
Average payables payment period 26 21 22 26 24
Short-term Activity Ratio
Cash conversion cycle1 106 95 99 95 89
Benchmarks
Cash Conversion Cycle, Competitors2
3M Co. 90 95 102 105 91
Boeing Co. 405 325 236 195 178
Caterpillar Inc. 134 115 106 106 113
General Electric Co. 79 60 72 106 113
Honeywell International Inc. 55 55 50 54 59
Lockheed Martin Corp. 28 31 22 86 89
Raytheon Technologies Corp. 65 65 71 79 84
Cash Conversion Cycle, Sector
Capital Goods 144 125 106 115 118
Cash Conversion Cycle, Industry
Industrials 115 101 88 94 97

Based on: 10-K (filing date: 2021-02-12), 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).

1 2020 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 59 + 7326 = 106

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Illinois Tool Works Inc.’s cash conversion cycle improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.