3M Company (MMM)

Activity ratios

Short-term

Turnover ratios

	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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover	3.83	3.63	3.51	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	4.15	4.21	3.92	3.69
Receivables turnover	6.88	6.75	6.68	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	6.71	6.37	5.98	6.25
Payables turnover	5.69	5.92	5.74	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	7.69	8.11	7.91	7.26
Working capital turnover	30.20	44.74	6.86	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	8.57	3.13	4.73	4.46

3M Co.'s activity ratios provide insight into how effectively the company manages its assets and liabilities to generate sales.

1. Inventory Turnover: This ratio indicates how many times during the period, the company sells and replaces its inventory. Over the period analyzed, the inventory turnover ranged from 3.51 to 3.83. A higher turnover ratio suggests efficient inventory management, as the company is selling its inventory quickly.

2. Receivables Turnover: This ratio measures how many times the company collects its accounts receivable during the period. 3M Co.'s receivables turnover ranged from 6.68 to 7.55. A higher turnover ratio implies that the company efficiently collects its outstanding receivables, indicating a healthy cash conversion cycle.

3. Payables Turnover: This ratio evaluates how many times a company pays its suppliers during the period. 3M Co.'s payables turnover ranged from 5.69 to 6.32. A higher payables turnover ratio suggests that the company is managing its payables effectively, possibly utilizing trade credit efficiently.

4. Working Capital Turnover: This ratio assesses how efficiently the company utilizes its working capital to generate sales. Over the period, 3M Co.'s working capital turnover varied significantly, from 6.86 to 44.74. A higher working capital turnover ratio indicates that the company efficiently converts its working capital into revenue.

In conclusion, the analyzed activity ratios suggest that 3M Co. is effectively managing its inventory, receivables, payables, and working capital to support its sales operations.

Average number of days

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	95.26	100.56	103.99	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	88.05	86.69	93.19	98.85
Days of sales outstanding (DSO)	days	53.05	54.08	54.63	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	54.42	57.31	61.05	58.37
Number of days of payables	days	64.10	61.63	63.64	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	47.46	44.98	46.16	50.30

Days of Inventory on Hand (DOH) indicates the average number of days it takes for 3M Co. to sell its inventory. In the most recent quarter, Q4 2023, the company had 95.26 days of inventory on hand, which decreased from the previous quarter. The decreasing trend in DOH suggests that 3M Co. is managing its inventory more efficiently and is able to turn over its inventory faster.

Days of Sales Outstanding (DSO) measures how long it takes for 3M Co. to collect payment from its customers. In Q4 2023, the company had a DSO of 53.05 days, which increased slightly compared to the previous quarter. The slight increase in DSO may indicate that 3M Co. is experiencing some delays in collecting payments from customers, which could potentially impact its cash flow.

Number of Days of Payables indicates the average number of days it takes for 3M Co. to pay its suppliers. In Q4 2023, the company had 64.10 days of payables, which increased from the previous quarter. A higher number of days of payables may suggest that 3M Co. is taking longer to pay its suppliers, possibly to improve its cash flow position.

Overall, based on the activity ratios, 3M Co. appears to have improved its inventory management, but may be facing challenges in collecting payments from customers and managing its payables efficiently. Monitoring these ratios can provide insights into the company's operational efficiency and cash flow management.

Long-term

	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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Fixed asset turnover	3.57	3.64	3.59	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	3.44	3.60	3.57	3.66
Total asset turnover	0.65	0.66	0.68	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	0.72	0.75	0.82	0.83

3M Co.'s fixed asset turnover ratio has been relatively stable over the past eight quarters, ranging from 3.57 to 3.78. This indicates that the company generates approximately $3.57 to $3.78 in sales for every dollar invested in fixed assets. A consistent fixed asset turnover ratio suggests efficient utilization of long-term assets to generate revenue.

On the other hand, the total asset turnover ratio has been on a slight declining trend, decreasing from 0.77 in Q1 2022 to 0.65 in Q4 2023. This implies that the company's ability to generate sales from all its assets has weakened over time. A lower total asset turnover ratio may indicate that 3M Co. is less efficient in utilizing all of its assets to generate revenue.

Overall, while the fixed asset turnover ratio remained steady, the decreasing trend in the total asset turnover ratio suggests a need for the company to improve its overall asset utilization efficiency to enhance revenue generation.