Price to FCFE (P/FCFE)

Free Cash Flow to Equity (FCFE)
P to FCFE Ratio, Current
P to FCFE Ratio, Historical

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Free Cash Flow to Equity (FCFE)

Illinois Tool Works Inc., FCFE calculation

US$ in millions

	12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
	Net income
	Net noncash charges
	Change in assets and liabilities, net of acquisitions and divestitures
	Net cash provided by operating activities
	Additions to plant and equipment
	Proceeds from sale of plant and equipment
	Net proceeds from (repayments of) debt with original maturities of three months or less
	Proceeds from debt with original maturities of more than three months
	Repayments of debt with original maturities of more than three months
	Free cash flow to equity (FCFE)

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).

Net Cash Provided by Operating Activities: The net cash generated from operating activities exhibited an overall upward trend from 2017 to 2019, increasing from $2,402 million in 2017 to $2,995 million in 2019. This growth indicates strengthening operational cash inflows during this period. However, following the peak in 2019, the figure declined in subsequent years, dropping to $2,807 million in 2020 and further to $2,557 million in 2021. Despite the decline, the cash generated in 2021 remained above the level recorded in 2017, suggesting a relatively solid operational cash flow base.
Free Cash Flow to Equity (FCFE): FCFE displayed more volatility compared to net operating cash flow. After starting at $2,316 million in 2017, there was a notable decrease in 2018 to $1,622 million. Subsequently, FCFE rebounded sharply in 2019 to $3,116 million, surpassing the earlier years. This peak was followed by declines in 2020 and 2021, with FCFE reducing to $2,577 million and $2,128 million respectively. The fluctuations in FCFE may reflect variations in capital expenditures, financing activities, or working capital changes impacting the residual cash flow available to equity holders.
Overall Analysis: The analysis of cash flow data points to a generally robust operational cash generating capacity with some weakening in the latter years of the period. Free cash flow to equity demonstrated greater sensitivity and variability, indicating potentially changing investment or financing strategies. The decline in both net operating cash flow and FCFE in 2020 and 2021 could be correlated with broader economic conditions or company-specific factors affecting cash generation and allocation. Nonetheless, both metrics remained at relatively strong levels compared to the starting period, signaling continued financial resilience.

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Price to FCFE Ratio, Current

Illinois Tool Works Inc., current P/FCFE calculation, comparison to benchmarks

No. shares of common stock outstanding
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)
FCFE per share
Current share price (P)
Valuation Ratio
P/FCFE
Benchmarks
P/FCFE, Competitors¹
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).

¹ Click competitor name to see calculations.

If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.

Price to FCFE Ratio, Historical

Illinois Tool Works Inc., historical P/FCFE calculation, comparison to benchmarks

		Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
	No. shares of common stock outstanding¹
	Selected Financial Data (US$)
	Free cash flow to equity (FCFE) (in millions)²
	FCFE per share³
	Share price^1, 4
	Valuation Ratio
	P/FCFE⁵
	Benchmarks
	P/FCFE, Competitors⁶
	Boeing Co.
	Caterpillar Inc.
	Eaton Corp. plc
	GE Aerospace
	Honeywell International Inc.
	Lockheed Martin Corp.
	RTX Corp.
	P/FCFE, Sector
	Capital Goods
	P/FCFE, Industry
	Industrials

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 See details »

³ 2021 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= ÷ =

⁴ Closing price as at the filing date of Illinois Tool Works Inc. Annual Report.

⁵ 2021 Calculation
P/FCFE = Share price ÷ FCFE per share
= ÷ =

⁶ Click competitor name to see calculations.

Share Price Trends: The share price demonstrated variability over the five-year period. It declined from $163.36 in 2017 to $144.21 in 2018, indicating a downturn during that year. Subsequently, the share price increased consistently each year, reaching $187.86 in 2019, $200.98 in 2020, and $217.72 in 2021. This upward trend after 2018 suggests a recovery and growth in market valuation.
Free Cash Flow to Equity (FCFE) per Share: FCFE per share exhibited fluctuations over the analyzed years. There was a decline from $6.78 in 2017 to $4.94 in 2018, followed by a substantial increase to $9.77 in 2019. The value then decreased to $8.14 in 2020 and further to $6.8 in 2021. These changes indicate variability in the cash generated for shareholders with a peak in 2019, after which a declining trend resumed.
Price to FCFE (P/FCFE) Ratio: The P/FCFE ratio showed significant volatility during the period. Beginning at 24.09 in 2017, it rose sharply to 29.17 in 2018, coinciding with the decline in FCFE per share while the share price decreased less proportionally. In 2019, there was a marked decrease to 19.22, reflecting an increase in FCFE per share that outpaced share price growth. The ratio climbed again to 24.7 in 2020, then experienced a notable jump to 32.02 in 2021, the highest level in the period, despite declining FCFE per share. This suggests investors were willing to pay more for each unit of cash flow in 2021 compared to prior years, possibly reflecting optimistic market expectations or lower FCFE generation.