Its: Indicates possession.
Example: The store held its grand opening last week.
It’s: The contraction of “it is.”
Example: It’s a perfect day to go out on the boat.
Let’s try it out:
Which is correct?
A. Emma is wearing a coat even though its hot outside.
B. Emma is wearing a coat even though it’s hot outside.
The correct answer is ‘B.’ Let’s take a closer look by slightly changing the sentence. “Emma is wearing a coat even though it is hot outside.” Now, it’s easy to see why ‘B’ is the correct choice.
Let’s try another example.
Why is correct?
A. I love the ocean because of it’s calming colors.
B. I love the ocean because of its calming colors.
The correct answer is “B.” The word “its” is referring to the ocean’s colors and therefore is a possessive reference.
Bonus tip: When referring to a company, use “its” instead of “they.” For example, “McDonald’s is one of the most popular fast food restaurants in the world. The company is recognized by its golden arches.”