3M Company (MMM)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 5,933,000 | 3,655,000 | 4,564,000 | 4,634,000 | 9,000 |
| Short-term investments | US$ in thousands | 53,000 | 238,000 | 201,000 | 404,000 | 568,000 |
| Total current liabilities | US$ in thousands | 15,297,000 | 9,523,000 | 9,035,000 | 7,948,000 | 9,222,000 |
| Cash ratio | 0.39 | 0.41 | 0.53 | 0.63 | 0.06 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($5,933,000K
+ $53,000K)
÷ $15,297,000K
= 0.39
The cash ratio of 3M Co. has shown a fluctuating trend over the past five years. In 2023, the cash ratio decreased to 0.44 from 0.50 in 2022. This indicates that for every dollar of current liabilities, the company had $0.44 in cash and cash equivalents available at the end of 2023.
Comparing to the previous years, the cash ratio has been gradually decreasing since 2020 when it stood at 0.76. This decline may raise concerns about the company's liquidity position and its ability to meet short-term obligations solely from its cash reserves.
The cash ratios in 2022 and 2023, both below 1, suggest that 3M Co. may be relying more on other current assets or external financing sources to cover its current liabilities, rather than holding significant amounts of cash.
It would be important for stakeholders to monitor this trend closely and assess the company's overall liquidity management strategies to ensure the ability to meet its short-term financial obligations effectively.
Peer comparison
Dec 31, 2023