3M Company (MMM)

Working capital 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
Total current assets	US$ in thousands	15,884,000	16,379,000	14,688,000	15,403,000	14,982,000
Total current liabilities	US$ in thousands	11,256,000	15,297,000	9,523,000	9,035,000	7,948,000
Working capital turnover		5.31	22.74	6.63	5.55	4.58

December 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $24,575,000K ÷ ($15,884,000K – $11,256,000K)
= 5.31

Based on the provided data, the working capital turnover for 3M Company has shown varying trends over the past five years. The working capital turnover indicates the efficiency with which the company is utilizing its working capital to generate sales.

In 2020, the working capital turnover was 4.58, which means that for every $1 of working capital, 3M generated $4.58 in sales. This ratio increased to 5.55 in 2021, suggesting an improvement in the efficiency of working capital utilization. Continuing this trend, the working capital turnover further increased to 6.63 in 2022.

The most significant spike in the working capital turnover occurred in 2023, reaching 22.74, which indicates a substantial improvement in the efficiency of working capital management. This could be attributed to better inventory and receivables management during that year.

However, there was a slight decline in the working capital turnover in 2024 to 5.31, indicating a decrease in the efficiency of working capital utilization compared to the previous year.

Overall, the trend in working capital turnover for 3M Company has been positive, with fluctuations in certain years possibly due to changes in sales volume, inventory management, or collection of receivables. Monitoring this ratio is essential to ensure effective working capital management and sustained operational efficiency.