3M Company (MMM)
Receivables turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 24,575,000 | 24,610,000 | 34,229,000 | 35,355,000 | 32,184,000 |
| Receivables | US$ in thousands | 3,194,000 | 4,750,000 | 4,532,000 | 4,660,000 | 4,705,000 |
| Receivables turnover | 7.69 | 5.18 | 7.55 | 7.59 | 6.84 |
December 31, 2024 calculation
Receivables turnover = Revenue ÷ Receivables
= $24,575,000K ÷ $3,194,000K
= 7.69
To analyze the receivables turnover of 3M Company based on the provided data, we calculate the receivables turnover ratio for each year.
The receivables turnover ratio is calculated by dividing the net credit sales by the average accounts receivable. A higher ratio indicates that the company is collecting its receivables more efficiently.
Here is the breakdown of the receivables turnover ratio for 3M Company over the past five years:
- December 31, 2020: 6.84
- December 31, 2021: 7.59
- December 31, 2022: 7.55
- December 31, 2023: 5.18
- December 31, 2024: 7.69
From the data, we observe that the receivables turnover ratio has fluctuated over the years. The company was able to collect its receivables more efficiently in 2021, 2022, and 2024 compared to 2020 and 2023. This improvement in receivables turnover indicates that 3M Company has been more effective in managing its accounts receivable and converting them into cash during those years.
Overall, a higher receivables turnover ratio signifies better liquidity and indicates that the company is effectively managing its credit sales and collection process. It is essential for investors and stakeholders to monitor this ratio to assess the company's efficiency in collecting receivables and managing its working capital effectively.
Peer comparison
Dec 31, 2024