3M Company (MMM)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | 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 |
| Receivables | US$ in thousands | 4,750,000 | 4,532,000 | 4,660,000 | 4,705,000 | 4,791,000 |
| Total current liabilities | US$ in thousands | 15,297,000 | 9,523,000 | 9,035,000 | 7,948,000 | 9,222,000 |
| Quick ratio | 0.70 | 0.88 | 1.04 | 1.23 | 0.58 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($5,933,000K
+ $53,000K
+ $4,750,000K)
÷ $15,297,000K
= 0.70
The quick ratio of 3M Co. has displayed a declining trend over the past five years. The quick ratio stood at 0.96 in 2019, followed by a notable increase to 1.35 in 2020. However, there was a subsequent decrease to 1.15 in 2021, further dropping to 0.98 in 2022, and finally hitting 0.76 in 2023.
A quick ratio below 1 indicates that 3M Co. may potentially have difficulty meeting its short-term obligations without selling inventory. The declining trend in the quick ratio raises concerns about the company's liquidity position and its ability to cover immediate liabilities with its most liquid assets. It is essential for 3M Co. to closely monitor and manage its liquidity position to ensure it can meet its short-term financial obligations effectively.
Peer comparison
Dec 31, 2023