ITW & Lincoln Electric Project

Vertical Analysis
-a tool to evaluate individual financial statements relative to a specific base
amount.

Income Statement- % of revenue

Balance sheet- % of total assets

Analysis Amount x 100

Base Amount
 Illinois Tool Works Inc. (ITW)
VERTICAL ANALYSIS
INCOME STATEMENT
12/31/2017 12/31/2016 12/31/2015 12/31/2014
Total Revenue 14,314,000 100.00% 13,599,000 100.00% 13,405,000 100.00% 14,484,000 100.00%
Cost of Revenue 8,309,000 58.05% 7,896,000 58.06% 7,888,000 58.84% 8,673,000 59.88%
Gross Profit 6,005,000 41.95% 5,703,000 41.94% 5,517,000 41.16% 5,811,000 40.12%
Operating Expenses
Research Development - - - -
Selling General and Administrative 2,400,000 16.77% 2,415,000 17.76% 2,417,000 18.03% 2,678,000 18.49%
Total Operating Expenses 10,915,000 76.25% 10,535,000 77.47% 10,536,000 78.60% 11,593,000 80.04%
Operating Income or Loss 3,399,000 23.75% 3,064,000 22.53% 2,869,000 21.40% 2,891,000 19.96%
Income from Continuing Operations
Total Other Income/Expenses Net -129,000 -0.90% -156,000 -1.15% -150,000 -1.12% -192,000 -1.33%
Earnings Before Interest and Taxes 3,399,000 23.75% 3,064,000 22.53% 2,869,000 21.40% 2,891,000 19.96%
Interest Expense -260,000 -237,000 -1.74% -226,000 -1.69% -250,000 -1.73%
Income Before Tax 3,270,000 22.84% 2,908,000 21.38% 2,719,000 20.28% 2,699,000 18.63%
Income Tax Expense 1,583,000 11.06% 873,000 6.42% 820,000 6.12% 809,000 5.59%
Minority Interest 4,000 0.03% 5,000 0.04% 4,000 0.03% 5,000 0.03%
Net Income From Continuing Ops 1,687,000 11.79% 2,035,000 14.96% 1,899,000 14.17% 1,890,000 13.05%
Discontinued Operations - - - 1,056,000 7.29%
Net Income 1,687,000 11.79% 2,035,000 14.96% 1,899,000 14.17% 2,946,000 20.34%
 Illinois Tool Works Inc.
BALANCE SHEET
Balance Sheet
Period Ending 12/31/2017 12/31/2016 12/31/2015 12/31/2014
Current Assets
Cash And Cash Equivalents 3,094,000 18.44% 2,472,000 16.26% 3,090,000 19.65% 3,990,000 22.85%
Short Term Investments - - - -
Net Receivables 2,819,000 16.80% 2,433,000 16.01% 2,398,000 15.25% 2,472,000 14.15%
Inventory 1,220,000 7.27% 1,076,000 7.08% 1,086,000 6.90% 1,180,000 6.76%
Other Current Assets 145,000 0.86% 142,000 0.93% 146,000 0.93% 222,000 1.27%
Total Current Assets 7,278,000 43.37% 6,123,000 40.28% 6,720,000 42.72% 7,864,000 45.03%
Long Term Investments 53,000 0.32% 73,000 0.48% 212,000 1.35% 251,000 1.44%
Property Plant and Equipment 1,778,000 10.60% 1,652,000 10.87% 1,577,000 10.03% 1,686,000 9.65%
Goodwill 4,752,000 28.32% 4,558,000 29.98% 4,439,000 28.22% 4,667,000 26.72%
Intangible Assets 1,272,000 7.58% 1,463,000 9.62% 1,560,000 9.92% 1,799,000 10.30%
Other Assets 1,647,000 9.82% 1,332,000 8.76% 1,221,000 7.76% 1,198,000 6.86%
Deferred Long Term Asset Charges 505,000 3.01% 449,000 2.95% 346,000 2.20% 338,000 1.94%
Total Assets 16,780,000 100.00% 15,201,000 100.00% 15,729,000 100.00% 17,465,000 100.00%
Current Liabilities
Accounts Payable 590,000 3.52% 511,000 3.36% 449,000 2.85% 512,000 2.93%
Short/Current Long Term Debt 1,000 0.01% 650,000 4.28% 1,000 0.01% 1,000 0.01%
Other Current Liabilities 605,000 3.61% 620,000 4.08% 472,000 3.00% 493,000 2.82%
Total Current Liabilities 3,053,000 18.19% 2,760,000 18.16% 2,368,000 15.05% 3,525,000 20.18%
Long Term Debt 7,478,000 44.56% 7,177,000 47.21% 6,896,000 43.84% 5,943,000 34.03%
Other Liabilities 1,660,000 9.89% 1,005,000 6.61% 1,237,000 7.86% 1,173,000 6.72%
Minority Interest 4,000 0.02% 5,000 0.03% 4,000 0.03% 5,000 0.03%
Total Liabilities 12,191,000 72.65% 10,942,000 71.98% 10,501,000 66.76% 10,641,000 60.93%
Stockholders' Equity
Common Stock 6,000 0.04% 6,000 0.04% 6,000 0.04% 6,000 0.03%
Retained Earnings 20,210,000 120.44% 19,505,000 128.31% 18,316,000 116.45% 17,173,000 98.33%
Treasury Stock -16,849,000 -100.41% -16,445,000 -108.18% -14,233,000 -90.49% -11,456,000 -65.59%
Capital Surplus 1,218,000 7.26% 1,188,000 7.82% 1,135,000 7.22% 1,096,000 6.28%
Other Stockholder Equity -1,287,000 -7.67% -1,807,000 -11.89% -1,504,000 -9.56% -658,000 -3.77%
Total Stockholder Equity 4,585,000 27.32% 4,254,000 27.99% 5,224,000 33.21% 6,819,000 39.04%
Net Tangible Assets -1,439,000 -8.58% -1,767,000 -11.62% -775,000 -4.93% 353,000 2.02%
 Lincoln Electric(LECO)
VERTICAL ANALYSIS
Income Statement
12/31/2017 12/31/2016 12/31/2015 12/31/2014
Total Revenue 2,624,431 100.00% 2,274,614 100.00% 2,535,791 100.00% 2,813,324 100.00%
Cost of Revenue 1,739,527 66.28% 1,485,316 65.30% 1,671,767 65.93% 1,860,559 66.13%
Gross Profit 884,904 33.72% 789,298 34.70% 864,024 34.07% 952,765 33.87%
Operating Expenses
Research Development 47,899 1.83% 44,720 1.97% 47,182 1.86% 43,256 1.54%
Selling General and Administrative 497,868 18.97% 404,601 17.79% 439,209 17.32% 462,225 16.43%
Total Operating Expenses 2,285,294 87.08% 1,934,637 85.05% 2,158,158 85.11% 2,366,040 84.10%
Operating Income or Loss 339,137 12.92% 339,977 14.95% 377,633 14.89% 447,284 15.90%
Income from Continuing Operations
Total Other Income/Expenses Net 27,099 1.03% -62,589 -2.75% -207,846 -8.20% -71,471 -2.54%
Earnings Before Interest and Taxes 339,137 12.92% 339,977 14.95% 377,633 14.89% 447,284 15.90%
Interest Expense -24,220 -0.92% -19,079 -0.84% -21,824 -0.86% -10,434 -0.37%
Income Before Tax 366,236 13.95% 277,388 12.19% 169,787 6.70% 375,813 13.36%
Income Tax Expense 118,761 4.53% 79,015 3.47% 42,375 1.67% 121,933 4.33%
Minority Interest 816 0.03% 729 0.03% 861 0.03% 3,232 0.11%
Net Income From Continuing Ops 247,475 9.43% 198,373 8.72% 127,412 5.02% 253,880 9.02%
Discontinued Operations - - - -
Net Income 247,503 9.43% 198,399 8.72% 127,478 5.03% 254,686 9.05%
 Lincoln Electric
Balance Sheet
Balance Sheet
Period Ending 12/31/2017 12/31/2016 12/31/2015 12/31/2014
Current Assets
Cash And Cash Equivalents 326,701 13.58% 379,179 19.51% 304,183 17.05% 278,379 14.36%
Short Term Investments 179,125 7.44% 38,922 2.00% - - -
Net Receivables 395,279 16.43% 273,993 14.10% 264,715 14.84% 337,664 17.41%
Inventory 348,667 14.49% 255,406 13.14% 275,930 15.47% 341,057 17.59%
Other Current Assets 108,237 4.50% 84,074 4.33% 79,543 4.46% 139,102 7.17%
Total Current Assets 1,373,608 57.08% 1,043,713 53.70% 935,995 52.46% 1,096,202 56.53%
Long Term Investments - - - 58,600 3.02%
Property Plant and Equipment 477,031 19.82% 372,377 19.16% 411,323 23.05% 438,746 22.62%
Goodwill 234,582 9.75% 231,919 11.93% 187,504 10.51% 180,127 9.29%
Intangible Assets 127,452 5.30% 130,088 6.69% 120,719 6.77% 132,689 6.84%
Other Assets 193,874 8.06% 165,340 8.51% 128,630 7.21% 32,851 1.69%
Deferred Long Term Asset Charges 15,937 0.66% 8,424 0.43% 8,683 0.49% 2,940 0.15%
Total Assets 2,406,547 100.00% 1,943,437 100.00% 1,784,171 100.00% 1,939,215 100.00%
Current Liabilities
Accounts Payable 269,763 11.21% 176,757 9.10% 152,620 8.55% 209,745 10.82%
Short/Current Long Term Debt 111 0.00% 131 0.01% 1,456 0.08% 7,011 0.36%
Other Current Liabilities 156,131 6.49% 136,683 7.03% 142,627 7.99% 100,340 5.17%
Total Current Liabilities 528,742 21.97% 388,107 19.97% 370,122 20.74% 492,395 25.39%
Long Term Debt 709,221 29.47% 709,143 36.49% 350,347 19.64% 2,488 0.13%
Other Liabilities 236,131 9.81% 133,981 6.89% 131,254 7.36% 158,551 8.18%
Minority Interest 816 0.03% 729 0.04% 861 0.05% 3,232 0.17%
Total Liabilities 1,474,094 61.25% 1,231,231 63.35% 851,723 47.74% 653,434 33.70%
Stockholders' Equity
Common Stock 9,858 0.41% 9,858 0.51% 9,858 0.55% 9,858 0.51%
Retained Earnings 2,388,219 99.24% 2,236,071 115.06% 2,125,838 119.15% 2,086,174 107.58%
Treasury Stock -1,800,749 -74.83% -1,843,869 -94.88% -1,477,017 -82.78% -1,072,299 -55.30%
Capital Surplus 334,309 13.89% 309,417 15.92% 272,908 15.30% 258,816 13.35%
Other Stockholder Equity -247,186 -10.27% -329,037 -16.93% -296,267 -16.61% -288,622 -14.88%
Total Stockholder Equity 931,637 38.71% 711,477 36.61% 931,587 52.21% 1,282,549 66.14%
Net Tangible Assets 569,603 23.67% 349,470 17.98% 623,364 34.94% 969,733 50.01%
 Illinois Tool Works Lincoln Electric

INCOME STATEMENT 12/23/2017 % of Revenue Income Statement 12/31/2017 % of Revenue

Total Revenue 14,314,000 100.00% Total Revenue 2,624,431 100.00%

Cost of Revenue 8,309,000 58.05% Cost of Revenue 1,739,527 66.28%
Gross Profit 6,005,000 41.95% Gross Profit 884,904 33.72%
Operating Expenses Operating Expenses
Research Development - Research Development 47,899 1.83%
Selling General and Administrative 2,400,000 16.77% Selling General and Administrative 497,868 18.97%
Total Operating Expenses 10,915,000 76.25% Total Operating Expenses 2,285,294 87.08%
Operating Income or Loss 3,399,000 23.75% Operating Income or Loss 339,137 12.92%
Income from Continuing Operations Income from Continuing Operations
Total Other Income/Expenses Net -129,000 -0.90% Total Other Income/Expenses Net 27,099 1.03%
Earnings Before Interest and Taxes 3,399,000 23.75% Earnings Before Interest and Taxes 339,137 12.92%
Interest Expense -260,000 Interest Expense -24,220 -0.92%
Income Before Tax 3,270,000 22.84% Income Before Tax 366,236 13.95%
Income Tax Expense 1,583,000 11.06% Income Tax Expense 118,761 4.53%
Minority Interest 4,000 0.03% Minority Interest 816 0.03%
Net Income From Continuing Ops 1,687,000 11.79% Net Income From Continuing Ops 247,475 9.43%
Discontinued Operations - Discontinued Operations -
Net Income 1,687,000 11.79% Net Income 247,503 9.43%