3M Company (MMM)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 18,477,000 | 19,232,000 | 18,795,000 | 16,605,000 | 17,136,000 |
| Payables | US$ in thousands | 3,245,000 | 3,183,000 | 2,994,000 | 2,561,000 | 2,228,000 |
| Payables turnover | 5.69 | 6.04 | 6.28 | 6.48 | 7.69 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $18,477,000K ÷ $3,245,000K
= 5.69
The payables turnover ratio for 3M Co. has experienced a gradual decline over the past five years, dropping from 7.69 in 2019 to 5.69 in 2023. This downward trend indicates that the company is taking longer to pay its suppliers in recent years. A lower payables turnover ratio could potentially indicate inefficiencies or liquidity issues within the company's operations, as it may be holding onto its payables for a longer period of time.
However, it is important to consider the payables turnover ratio in conjunction with other financial ratios and metrics to gain a comprehensive understanding of 3M Co.'s financial performance and management of working capital. Further analysis of the company's cash flow, liquidity position, and overall financial health would provide more insights into the reasons behind the declining payables turnover ratio and its implications for the company's operations and profitability.
Peer comparison
Dec 31, 2023