3M Company (MMM)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 32,681,000 | 34,229,000 | 35,355,000 | 32,184,000 | 32,136,000 |
| Receivables | US$ in thousands | 4,750,000 | 4,532,000 | 4,660,000 | 4,705,000 | 4,791,000 |
| Receivables turnover | 6.88 | 7.55 | 7.59 | 6.84 | 6.71 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $32,681,000K ÷ $4,750,000K
= 6.88
The receivables turnover ratio measures how efficiently a company is able to collect its accounts receivable during a specific period. A higher turnover ratio indicates a shorter time for the company to collect cash from credit sales, reflecting better efficiency in managing its receivables.
For 3M Co., the trend in the receivables turnover ratio over the past five years shows a generally stable performance. The ratio ranged from 6.71 to 7.59 during this period, with a slight fluctuation but remaining relatively consistent.
In 2023, the receivables turnover ratio was 6.88, a decrease from 7.55 in 2022. This decline may suggest that 3M Co. took a slightly longer time to collect its accounts receivable compared to the previous year. However, it is important to consider industry benchmarks and company-specific factors to assess the significance of this change.
Overall, 3M Co. has maintained a reasonably efficient collection of its receivables, as indicated by the consistent turnover ratios over the years. Further analysis of the company's credit policies, customer base, and industry dynamics could provide additional insights into its receivables management practices.
Peer comparison
Dec 31, 2023