Enterprise Value (EV)
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Illinois Tool Works Inc. pages available for free this week:
- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Total Asset Turnover since 2005
- Analysis of Revenues
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Current Enterprise Value (EV)
Illinois Tool Works Inc., current enterprise value calculation
| Current share price (P) | |
| No. shares of common stock outstanding | |
| US$ in millions | |
| Common equity (market value)1 | |
| Add: Noncontrolling interest (per books) | |
| Total equity | |
| Add: Short-term debt (per books) | |
| Add: Long-term debt (per books) | |
| Total equity and debt | |
| Less: Cash and equivalents | |
| Enterprise value (EV) | |
Based on: 10-K (reporting date: 2021-12-31).
1 Common equity (market value) = Share price × No. shares of common stock outstanding
= ×
Historical Enterprise Value (EV)
Illinois Tool Works Inc., EV calculation
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 Data adjusted for splits and stock dividends.
2 Closing price as at the filing date of Illinois Tool Works Inc. Annual Report.
3 2021 Calculation
Common equity (market value) = Share price × No. shares of common stock outstanding
= ×
The analysis of the annual financial data reveals several notable trends in the company's equity and capital structure over the five-year period from 2017 to 2021.
- Common Equity (Market Value)
- The common equity market value exhibited a fluctuating trend. It decreased from approximately 55.8 billion USD in 2017 to about 47.3 billion USD in 2018, indicating a reduction of roughly 15%. Subsequently, it recovered in 2019 to nearly 59.9 billion USD and continued an upward trajectory through 2020 and 2021, reaching approximately 68.1 billion USD. This pattern suggests a market valuation dip in 2018, followed by a sustained increase in shareholder value over the next three years.
- Total Equity
- Total equity closely mirrors the common equity market value, with figures almost identical for each year. This alignment suggests that the market value reflects the book value of equity with minor differences, and both show the same downward and then upward trend over the period, reaffirming the company's strengthening equity base after 2018.
- Total Equity and Debt
- The combined total of equity and debt rose consistently each year from 64.1 billion USD in 2017 to 75.8 billion USD in 2021. This steady increase demonstrates the company's growing capital base, incorporating both liabilities and shareholders' equity. The increase over five years amounts to approximately 18%, indicating ongoing investment or financing activities expanding the company's overall capital structure.
- Enterprise Value (EV)
- The enterprise value followed a similar trajectory to total equity and debt but remained slightly lower in magnitude each year. From roughly 61.0 billion USD in 2017, EV dropped to about 53.2 billion USD in 2018, paralleling the decline observed in market equity value. Thereafter, it increased progressively, reaching nearly 74.3 billion USD by 2021. The initial decline may reflect market or operational challenges in 2018, while the subsequent growth points to enhanced enterprise worth and investor confidence.
Overall, the data indicates a temporary contraction in valuation and equity in 2018, followed by a steady recovery and growth through to 2021. The continuous increase in total equity and debt suggests a deliberate strategy to expand the capital base, supporting sustainable growth. The consistent relationship among common equity, total equity, and enterprise value reflects coherent financial management and market valuation alignment during the observed period.