3M Company (MMM)
Pretax margin
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before tax but after interest (EBT) | US$ in thousands | -9,686,000 | 6,389,000 | 7,206,000 | 6,786,000 | 5,631,000 |
| Revenue | US$ in thousands | 32,681,000 | 34,229,000 | 35,355,000 | 32,184,000 | 32,136,000 |
| Pretax margin | -29.64% | 18.67% | 20.38% | 21.09% | 17.52% |
December 31, 2023 calculation
Pretax margin = EBT ÷ Revenue
= $-9,686,000K ÷ $32,681,000K
= -29.64%
3M Co.'s pretax margin has displayed significant fluctuation over the past five years. The pretax margin dropped sharply to a negative value of -29.59% in 2023 from a positive value of 18.71% in 2022. This indicates that the company incurred significant losses before taxes in 2023, a substantial decrease from the profitability it experienced in the prior year.
In 2021 and 2020, the pretax margin stood at 20.40% and 20.84% respectively, showing a relatively stable performance in terms of generating profits before taxes during those years. This suggests that the company was effectively managing its expenses and generating healthy profits compared to its revenue.
In 2019, the pretax margin was recorded at 17.77%, indicating a reasonable level of profitability before taxes. However, the margin improvement seen in 2021 and 2020 was not sustained in the following years, as evidenced by the decline to negative territory in 2023.
Overall, the fluctuating pretax margin of 3M Co. highlights the importance of closely monitoring and managing operating costs and revenue generation to ensure sustained profitability and financial health. It is essential for the company to address the factors contributing to the sharp decline in pretax margin in 2023 to safeguard its financial performance in the future.
Peer comparison
Dec 31, 2023