W.W. Grainger (W.W. Grainger) Operating Income : $2,565 Mil (TTM As of Dec. 2023)

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What is W.W. Grainger Operating Income?

W.W. Grainger's Operating Income for the three months ended in Dec. 2023 was $557 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Dec. 2023 was $2,565 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. W.W. Grainger's Operating Income for the three months ended in Dec. 2023 was $557 Mil. W.W. Grainger's Revenue for the three months ended in Dec. 2023 was $3,997 Mil. Therefore, W.W. Grainger's Operating Margin % for the quarter that ended in Dec. 2023 was 13.94%.

Good Sign:

W.W. Grainger Inc operating margin is expanding. Margin expansion is usually a good sign.

W.W. Grainger's 5-Year average Growth Rate for Operating Margin % was 9.60% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. W.W. Grainger's annualized ROC % for the quarter that ended in Dec. 2023 was 27.97%. W.W. Grainger's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2023 was 45.34%.

W.W. Grainger Operating Income Historical Data

The historical data trend for W.W. Grainger's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

W.W. Grainger Operating Income Chart

W.W. Grainger Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Operating Income

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1,262.00

1,019.00

1,547.00

2,215.00

2,565.00

W.W. Grainger Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Operating Income	Get a 7-Day Free Trial															544.00	680.00	661.00	667.00	557.00

W.W. Grainger Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Dec. 2023 adds up the quarterly data reported by the company within the most recent 12 months, which was $2,565 Mil.

W.W. Grainger (NYSE:GWW) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

W.W. Grainger's annualized ROC % for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	2228 * ( 1 - 23.84% )	/	( (6045	+	6088)	/ 2 )
=	1696.8448	/	6066.5
=	27.97 %

where

	Invested Capital		(Q: Sep. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	8140	-	1494	-	( 601	-	max(0, 1898	-	5412	+	601	))
=	6045

	Invested Capital		(Q: Dec. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	8147	-	1399	-	( 660	-	max(0, 1831	-	5274	+	660	))
=	6088

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

2. Joel Greenblatt's definition of Return on Capital:

W.W. Grainger's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2023 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Dec. 2023 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Sep. 2023		Q: Dec. 2023
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	2256	/	( ( (1956 + max(3020, 0))	+	(2087 + max(2888, 0)) )	/	2 )
=	2256	/	( ( 4976	+	4975 )	/	2 )
=	2256	/	4975.5
=	45.34 %

where Working Capital is:

	Working Capital		(Q: Sep. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(2444	+	2196	+	171)	-	(1494	+	0	+	297)
=	3020

	Working Capital		(Q: Dec. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(2192	+	2266	+	156)	-	(1399	+	0	+	327)
=	2888

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Dec. 2023) EBIT data.

3. Operating Income is also linked to Operating Margin %:

W.W. Grainger's Operating Margin % for the quarter that ended in Dec. 2023 is calculated as:

Operating Margin %	=	Operating Income (Q: Dec. 2023 )	/	Revenue (Q: Dec. 2023 )
	=	557	/	3997
	=	13.94 %

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

W.W. Grainger Operating Income Related Terms

Thank you for viewing the detailed overview of W.W. Grainger's Operating Income provided by GuruFocus.com. Please click on the following links to see related term pages.

W.W. Grainger (W.W. Grainger) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Distribution » W.W. Grainger Inc (NYSE:GWW) » Definitions » Operating Income

Comparable Companies

Traded in Other Exchanges

GWW:Germany GWW:Germany G1WW34:Brazil GWW:Austria

Address

100 Grainger Parkway, Lake Forest, IL, USA, 60045-5201

Website

https://www.grainger.com

W.W. Grainger distributes approximately 1.5 million maintenance, repair, and operating products that are sourced from over 4,500 suppliers. The company serves about 5 million customers through its online and electronic purchasing platforms, vending machines, catalog distribution, and network of over 300 global branches. In recent years, Grainger has invested in its e-commerce capabilities and is the 11th-largest e-retailer in North America.

Executives

Laurie R Thomson	officer: VP, Controller	100 GRAINGER PARKWAY, LAKE FOREST IL 60045
Donald G Macpherson	director, officer: Chairman and CEO	100 GRAINGER PARKWAY, LAKE FOREST IL 60045
Matt Fortin	officer: SVP & Chief HR Officer	100 GRAINGER PARKWAY, LAKE FOREST IL 60045
George S Davis	director	100 GRAINGER PARKWAY, LAKE FOREST IL 60045
Rodney C Adkins	director	55 GLENLAKE PARKWAY, NE, ATLANTA GA 30328
Katherine D. Jaspon	director	130 ROYALL STREET, C/O DUNKIN' BRANDS, INC., CANTON MA 02021
Susan Slavik Williams	director	4450 MACARTHUR BLVD., SECOND FLOOR, NEWPORT BEACH CA 92660
Stuart L Levenick	director	100 NE ADAMS STREET, PEORIA IL 61629
Neil S Novich	director	RYERSON LTULL INC, 2621 W 15TH PLACE, CHICAGO IL 60603
V Ann Hailey	director	THREE LIMITED PARKWAY, COLUMBUS OH 43230
Steven Andrew White	director	1 HORMEL PLACE, AUSTIN MN 55912
Beatriz R Perez	director	ONE COCA-COLA PLAZA, ATLANTA GA 30313
Ernest Scott Santi	director	ILLINOIS TOOL WORKS INC., 155 HARLEM AVE., GLENVIEW IL 60025
Lucas E Watson	director	100 GRAINGER PARKWAY, LAKE FOREST IL 60045
Paige K Robbins	officer: Sr. VP (see Remarks)	100 GRAINGER PARKWAY, LAKE FOREST IL 60045