3M Company (MMM)
Liquidity ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.07 | 1.05 | 1.44 | 1.42 | 1.54 | 1.56 | 1.47 | 1.58 | 1.70 | 1.70 | 1.73 | 1.83 | 1.89 | 1.90 | 1.94 | 1.65 | 1.41 | 2.30 | 1.93 | 2.02 |
| Quick ratio | 0.70 | 0.65 | 0.85 | 0.82 | 0.88 | 0.87 | 0.80 | 0.89 | 1.04 | 1.11 | 1.11 | 1.19 | 1.23 | 1.24 | 1.23 | 1.02 | 1.56 | 1.63 | 1.15 | 1.21 |
| Cash ratio | 0.39 | 0.34 | 0.39 | 0.38 | 0.41 | 0.38 | 0.30 | 0.37 | 0.53 | 0.60 | 0.58 | 0.61 | 0.63 | 0.62 | 0.61 | 0.49 | 1.04 | 0.99 | 0.41 | 0.49 |
3M Co.'s liquidity ratios provide insight into the company's ability to meet its short-term obligations.
- Current Ratio: This ratio measures the company's ability to cover its short-term liabilities with its current assets. A current ratio above 1 indicates the company can meet its short-term obligations. 3M Co.'s current ratio has shown some fluctuation over the past few quarters, ranging from 1.07 to 1.58. The current ratio decreased in Q3 and Q4 2023 compared to the previous quarters. This may indicate potential challenges in meeting short-term obligations or a less efficient management of current assets.
- Quick Ratio: Also known as the acid-test ratio, this ratio provides a more conservative measure of liquidity by excluding inventory from current assets. A quick ratio below 1 may indicate potential difficulty in meeting short-term obligations without relying on selling inventory. 3M Co.'s quick ratio has ranged from 0.72 to 1.00 over the past quarters, showing a decreasing trend in Q3 and Q4 2023. This indicates that 3M Co. may be less able to cover its short-term liabilities with its most liquid assets in the recent quarters.
- Cash Ratio: The cash ratio is the most conservative liquidity ratio as it only considers cash and cash equivalents to cover current liabilities. A cash ratio below 1 may suggest the company may struggle to cover its short-term obligations with available cash. 3M Co.'s cash ratio has fluctuated between 0.40 and 0.51 in the past quarters, with a slight increase in Q3 and Q4 2023. The lower cash ratio values suggest that 3M Co. may have a limited ability to cover its current liabilities with cash on hand alone.
Overall, the liquidity ratios of 3M Co. indicate some volatility and a potential need for the company to closely monitor its ability to meet short-term obligations, particularly in the recent quarters where the ratios have shown a downward trend.
See also:
3M Company Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 84.20 | 93.01 | 94.98 | 92.40 | 89.87 | 97.73 | 95.59 | 90.38 | 86.77 | 92.02 | 91.34 | 91.69 | 90.24 | 92.40 | 100.64 | 97.72 | 95.01 | 99.02 | 108.08 | 106.92 |
The cash conversion cycle of 3M Co. has shown fluctuation over the past eight quarters. There was a decrease in the cash conversion cycle from Q3 2022 to Q4 2022, followed by an increase in Q1 2023. However, the cycle decreased in Q2 2023, only to rise again in the following quarters.
Overall, the company's cash conversion cycle has been relatively stable, hovering around the 90-95 day range. This indicates that 3M Co. takes approximately 90-95 days to convert its investments in inventory and other resources back into cash from sales. Monitoring this cycle is crucial for the company's liquidity management and operational efficiency.