3M Company (MMM)
Current ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| 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 |
| Current ratio | 1.07 | 1.54 | 1.70 | 1.89 | 1.41 |
December 31, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $16,379,000K ÷ $15,297,000K
= 1.07
The current ratio of 3M Co. has shown a declining trend over the past five years. In December 2023, the current ratio stands at 1.07, indicating a decrease from the previous year's ratio of 1.54. This decline suggests that the company may have a lower ability to cover its short-term obligations with its current assets compared to the previous year.
Looking at the historical data, the current ratio had been relatively stable between December 2020 and December 2022, ranging from 1.70 to 1.89. However, there was a notable decrease in the current ratio in December 2023, falling below the industry benchmark of 2. A current ratio below 1 would often be considered a red flag as it may indicate potential liquidity issues.
Further analysis, such as examining the components of current assets and liabilities contributing to the current ratio, would provide more insights into 3M Co.'s liquidity position. It is essential for investors and stakeholders to monitor this trend closely to gauge the company's short-term financial health and ability to meet its obligations.
Peer comparison
Dec 31, 2023