Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Illinois Tool Works Inc., profitability ratios
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).
| 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. gross profit margin ratio deteriorated from 2019 to 2020 and from 2020 to 2021. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Illinois Tool Works Inc. operating profit margin ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Illinois Tool Works Inc. net profit margin ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level. |
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Illinois Tool Works Inc. ROE deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021. |
| ROA | A profitability ratio calculated as net income divided by total assets. | Illinois Tool Works Inc. ROA deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level. |
Gross Profit Margin
Illinois Tool Works Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | 5,966) | 5,199) | 5,922) | 6,164) | 6,005) | |
| Operating revenue | 14,455) | 12,574) | 14,109) | 14,768) | 14,314) | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 41.27% | 41.35% | 41.97% | 41.74% | 41.95% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Boeing Co. | 4.84% | -9.78% | 5.83% | — | — | |
| Caterpillar Inc. | 26.30% | 25.47% | 27.83% | — | — | |
| Eaton Corp. plc | 32.28% | 30.52% | 32.97% | — | — | |
| GE Aerospace | 24.19% | 17.26% | 23.52% | — | — | |
| Honeywell International Inc. | 35.85% | 32.07% | 33.70% | — | — | |
| Lockheed Martin Corp. | 13.52% | 13.23% | 13.99% | — | — | |
| RTX Corp. | 19.40% | 15.08% | 25.93% | — | — | |
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 2021 Calculation
Gross profit margin = 100 × Gross profit ÷ Operating revenue
= 100 × 5,966 ÷ 14,455 = 41.27%
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. gross profit margin ratio deteriorated from 2019 to 2020 and from 2020 to 2021. |
Operating Profit Margin
Illinois Tool Works Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | 3,477) | 2,882) | 3,402) | 3,584) | 3,494) | |
| Operating revenue | 14,455) | 12,574) | 14,109) | 14,768) | 14,314) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 24.05% | 22.92% | 24.11% | 24.27% | 24.41% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Boeing Co. | -4.66% | -21.95% | -2.58% | — | — | |
| Caterpillar Inc. | 14.27% | 11.67% | 16.33% | — | — | |
| Eaton Corp. plc | 15.69% | 11.45% | 13.38% | — | — | |
| GE Aerospace | 8.58% | 5.49% | 12.84% | — | — | |
| Honeywell International Inc. | 18.03% | 17.45% | 18.66% | — | — | |
| Lockheed Martin Corp. | 13.61% | 13.22% | 14.29% | — | — | |
| RTX Corp. | 7.70% | -3.34% | 11.64% | — | — | |
| Operating Profit Margin, Sector | ||||||
| Capital Goods | 9.11% | 3.00% | 10.93% | — | — | |
| Operating Profit Margin, Industry | ||||||
| Industrials | 9.80% | 4.43% | 9.67% | — | — | |
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 2021 Calculation
Operating profit margin = 100 × Operating income ÷ Operating revenue
= 100 × 3,477 ÷ 14,455 = 24.05%
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. operating profit margin ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level. |
Net Profit Margin
Illinois Tool Works Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 2,694) | 2,109) | 2,521) | 2,563) | 1,687) | |
| Operating revenue | 14,455) | 12,574) | 14,109) | 14,768) | 14,314) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 18.64% | 16.77% | 17.87% | 17.36% | 11.79% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Boeing Co. | -6.75% | -20.42% | -0.83% | — | — | |
| Caterpillar Inc. | 13.47% | 7.68% | 12.00% | — | — | |
| Eaton Corp. plc | 10.92% | 7.90% | 10.34% | — | — | |
| GE Aerospace | -9.17% | 7.81% | -5.69% | — | — | |
| Honeywell International Inc. | 16.11% | 14.64% | 16.73% | — | — | |
| Lockheed Martin Corp. | 9.42% | 10.45% | 10.42% | — | — | |
| RTX Corp. | 6.00% | -6.22% | 7.19% | — | — | |
| Net Profit Margin, Sector | ||||||
| Capital Goods | 3.71% | 1.85% | 5.03% | — | — | |
| Net Profit Margin, Industry | ||||||
| Industrials | 6.43% | 1.43% | 3.90% | — | — | |
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 2021 Calculation
Net profit margin = 100 × Net income ÷ Operating revenue
= 100 × 2,694 ÷ 14,455 = 18.64%
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. net profit margin ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level. |
Return on Equity (ROE)
Illinois Tool Works Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 2,694) | 2,109) | 2,521) | 2,563) | 1,687) | |
| Stockholders’ equity attributable to ITW | 3,625) | 3,181) | 3,026) | 3,254) | 4,585) | |
| Profitability Ratio | ||||||
| ROE1 | 74.32% | 66.30% | 83.31% | 78.76% | 36.79% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 39.37% | 19.56% | 41.77% | — | — | |
| Eaton Corp. plc | 13.06% | 9.44% | 13.75% | — | — | |
| GE Aerospace | -16.17% | 16.04% | -17.58% | — | — | |
| Honeywell International Inc. | 29.85% | 27.23% | 33.22% | — | — | |
| Lockheed Martin Corp. | 57.62% | 113.60% | 199.23% | — | — | |
| RTX Corp. | 5.29% | -4.88% | 13.25% | — | — | |
| ROE, Sector | ||||||
| Capital Goods | 8.48% | 4.42% | 18.11% | — | — | |
| ROE, Industry | ||||||
| Industrials | 16.58% | 3.94% | 13.76% | — | — | |
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 2021 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity attributable to ITW
= 100 × 2,694 ÷ 3,625 = 74.32%
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. ROE deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021. |
Return on Assets (ROA)
Illinois Tool Works Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 2,694) | 2,109) | 2,521) | 2,563) | 1,687) | |
| Total assets | 16,077) | 15,612) | 15,068) | 14,870) | 16,780) | |
| Profitability Ratio | ||||||
| ROA1 | 16.76% | 13.51% | 16.73% | 17.24% | 10.05% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Boeing Co. | -3.03% | -7.80% | -0.48% | — | — | |
| Caterpillar Inc. | 7.84% | 3.83% | 7.77% | — | — | |
| Eaton Corp. plc | 6.30% | 4.43% | 6.74% | — | — | |
| GE Aerospace | -3.28% | 2.25% | -1.87% | — | — | |
| Honeywell International Inc. | 8.60% | 7.40% | 10.47% | — | — | |
| Lockheed Martin Corp. | 12.41% | 13.47% | 13.11% | — | — | |
| RTX Corp. | 2.39% | -2.17% | 3.96% | — | — | |
| ROA, Sector | ||||||
| Capital Goods | 1.86% | 0.80% | 2.72% | — | — | |
| ROA, Industry | ||||||
| Industrials | 3.83% | 0.74% | 2.39% | — | — | |
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 2021 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 2,694 ÷ 16,077 = 16.76%
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. ROA deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level. |