3M Company (MMM)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	93.43	96.08	101.95	96.81	93.18
Days of sales outstanding (DSO)	days	47.44	70.45	48.33	48.11	53.36
Number of days of payables	days	67.20	67.63	60.41	58.14	56.29
Cash conversion cycle	days	73.66	98.90	89.87	86.77	90.24

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 93.43 + 47.44 – 67.20
= 73.66

The cash conversion cycle of 3M Company has shown fluctuations in recent years.

As of December 31, 2020, the cash conversion cycle stood at 90.24 days, indicating that it took approximately 90 days for 3M to convert its investments in inventory and other resources into cash inflows from sales.

By December 31, 2021, the cash conversion cycle decreased to 86.77 days, suggesting an improvement in the efficiency of the company's working capital management.

However, by December 31, 2022, the cash conversion cycle increased to 89.87 days, signaling a slight worsening of the company's ability to convert its resources into cash.

By December 31, 2023, the cash conversion cycle further increased to 98.90 days, indicating a significant slowdown in the company's conversion of investments into cash inflows.

The most recent data as of December 31, 2024, shows a substantial improvement in the cash conversion cycle, decreasing to 73.66 days. This suggests that 3M Company has made positive changes in its operational efficiency and working capital management.

Overall, fluctuations in the cash conversion cycle of 3M Company highlight the importance of closely monitoring working capital metrics to ensure efficient management of resources and liquidity in the business operations.