3M Company (MMM)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Inventory turnover	3.91	3.59	3.59	3.01	4.02	3.29	3.34	3.58	3.58	3.45	3.45	3.61	3.77	3.73	3.70	3.82	3.92	4.15	3.94	4.02
Receivables turnover	7.69	6.96	6.87	5.17	5.60	5.91	6.27	7.21	7.55	7.36	7.14	7.34	7.59	7.19	6.96	6.84	6.84	6.86	7.03	6.71
Payables turnover	5.43	5.39	5.18	4.37	5.71	5.36	5.46	6.08	6.04	6.32	5.95	6.04	6.28	6.46	6.12	6.37	6.48	7.49	8.32	7.67
Working capital turnover	5.31	5.01	4.75	2.91	24.57	39.16	6.44	7.59	6.63	6.50	7.60	6.67	5.55	5.20	5.03	4.72	4.58	4.73	4.59	5.43

3M Company's activity ratios provide insight into how efficiently the company is managing its inventory, receivables, payables, and working capital.

- Inventory turnover: 3M's inventory turnover has been fluctuating over the years, ranging from a low of 3.01 to a high of 4.15. A decreasing trend in inventory turnover may suggest difficulties in selling inventory or overstocking, while an increasing trend indicates improved inventory management efficiency.

- Receivables turnover: The receivables turnover ratio measures how quickly 3M collects outstanding receivables. The company's receivables turnover has also shown variation, with values ranging from 5.17 to 7.69. A decreasing trend in receivables turnover may signal issues with collecting payments from customers, while an increasing trend reflects quicker collections.

- Payables turnover: 3M's payables turnover ratio illustrates how efficiently the company is managing its accounts payable. The values have fluctuated between 4.37 and 8.32, indicating variability in the company's payment practices. A decreasing trend in payables turnover may suggest delays in paying suppliers, while an increasing trend indicates more timely payment.

- Working capital turnover: The working capital turnover ratio reflects how effectively 3M is utilizing its working capital to generate sales. The company's working capital turnover has exhibited significant variation, with values ranging from 2.91 to 39.16. A declining trend in working capital turnover may indicate inefficiencies in capital allocation, while a rising trend suggests better utilization of resources to drive sales.

Overall, analyzing 3M Company's activity ratios can help assess its operational efficiency, identify potential areas for improvement in managing inventory, receivables, payables, and working capital, and provide insights for optimizing working capital utilization to drive profitability.

Average number of days

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Days of inventory on hand (DOH)	days	93.43	101.69	101.73	121.39	90.81	111.09	109.17	101.83	101.95	105.94	105.83	101.11	96.81	97.74	98.54	95.60	93.18	87.91	92.61	90.89
Days of sales outstanding (DSO)	days	47.44	52.42	53.17	70.56	65.21	61.79	58.22	50.64	48.33	49.58	51.12	49.74	48.11	50.79	52.45	53.34	53.36	53.21	51.91	54.40
Number of days of payables	days	67.20	67.70	70.48	83.59	63.92	68.08	66.80	60.07	60.41	57.79	61.36	60.48	58.14	56.51	59.65	57.26	56.29	48.72	43.88	47.57

Based on the data provided, we can analyze the activity ratios of 3M Company as follows:

1. Days of Inventory on Hand (DOH):
- The average DOH for 3M over the data period is 97.73 days.
- The DOH has shown volatility throughout the period, ranging from a low of 87.91 days in September 2020 to a high of 121.39 days in March 2024.
- A higher DOH indicates that 3M is taking longer to sell its inventory, which could tie up capital and increase carrying costs.

2. Days of Sales Outstanding (DSO):
- The average DSO for 3M over the data period is 54.85 days.
- The DSO has fluctuated over the period, with the highest value of 70.56 days in March 2024 and the lowest value of 47.44 days in December 2024.
- A higher DSO suggests that 3M is taking longer to collect its accounts receivable, which could impact cash flow and liquidity.

3. Number of Days of Payables:
- The average number of days of payables for 3M over the data period is 60.63 days.
- The number of days of payables has shown variability, ranging from a low of 43.88 days in June 2020 to a high of 83.59 days in March 2024.
- A higher number of days of payables indicates that 3M is taking longer to pay its suppliers, which could signal potential cash flow advantages but may also strain relationships with suppliers.

In summary, 3M's activity ratios suggest fluctuations in inventory management, accounts receivable collection, and accounts payable policies over the data period. Monitoring and effectively managing these ratios are crucial for optimizing working capital efficiency and overall liquidity position.

Long-term

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Fixed asset turnover	3.33	3.26	3.28	2.71	3.46	3.18	3.37	3.62	3.73	3.78	3.76	3.76	3.75	3.79	3.71	3.57	3.42	3.44	3.45	3.53
Total asset turnover	0.62	0.60	0.57	0.44	0.53	0.58	0.63	0.71	0.74	0.75	0.77	0.77	0.75	0.73	0.72	0.70	0.68	0.70	0.70	0.70

The fixed asset turnover ratio for 3M Company has shown fluctuating trends over the reporting periods, ranging from a high of 3.79 in September 2021 to a low of 2.71 in March 2024. This ratio measures the efficiency of the company in generating sales from its fixed assets, indicating that the company was able to generate sales revenue of approximately 3.76 times for every dollar invested in fixed assets as of December 31, 2022.

On the other hand, the total asset turnover ratio has also exhibited variation, with values fluctuating between 0.53 in December 2023 and 0.77 in March 2022. This ratio reflects the company's overall efficiency in utilizing all its assets to generate sales. It indicates that revenue generated decreased compared to the level of total assets the company held in December 2023, with only $0.53 in revenue generated for every dollar of assets.

Overall, the fixed asset turnover ratio demonstrates the company's ability to efficiently utilize its fixed assets to generate sales revenue, while the total asset turnover ratio highlights the company's overall efficiency in generating revenue from all its assets. Both ratios provide insights into 3M Company's operational performance and efficiency in utilizing its assets for revenue generation.