3M Company (MMM)
Working capital 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 |
| Total current assets | US$ in thousands | 16,379,000 | 14,688,000 | 15,403,000 | 14,982,000 | 12,971,000 |
| Total current liabilities | US$ in thousands | 15,297,000 | 9,523,000 | 9,035,000 | 7,948,000 | 9,222,000 |
| Working capital turnover | 30.20 | 6.63 | 5.55 | 4.58 | 8.57 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $32,681,000K ÷ ($16,379,000K – $15,297,000K)
= 30.20
The working capital turnover ratio for 3M Co. has significantly improved over the past five years. From a level of 8.57 in 2019, the ratio rose substantially to 30.20 in 2023, indicating that the company has become more efficient in utilizing its working capital to generate sales revenue.
The significant increase in the working capital turnover ratio may suggest that 3M has optimized its inventory management and accounts receivable collection processes. This improvement implies that the company is able to generate more sales revenue for each unit of working capital invested, reflecting a more efficient use of its resources.
Overall, the trend in the working capital turnover ratio for 3M Co. shows a positive trajectory, indicating enhanced operational efficiency and potentially stronger financial performance.
Peer comparison
Dec 31, 2023