3M Company (MMM)
Return on assets (ROA)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | -6,995,000 | 5,777,000 | 5,921,000 | 5,449,000 | 4,517,000 |
| Total assets | US$ in thousands | 50,580,000 | 46,455,000 | 47,072,000 | 47,344,000 | 44,659,000 |
| ROA | -13.83% | 12.44% | 12.58% | 11.51% | 10.11% |
December 31, 2023 calculation
ROA = Net income ÷ Total assets
= $-6,995,000K ÷ $50,580,000K
= -13.83%
The return on assets (ROA) for 3M Co. has exhibited some fluctuations over the past five years. The ROA was negative at -13.83% in 2023, which indicates that the company's net income generated from its assets was insufficient to cover the total assets. This could be a cause for concern as it suggests that the company may not be effectively utilizing its assets to generate profits.
In contrast, the ROA was positive in the preceding four years, with values ranging from 10.23% in 2019 to 12.58% in 2021. A higher ROA signifies that the company is more efficient in generating profits relative to its total assets.
Overall, while the ROA for 3M Co. has shown some variability, it is essential for the company to sustain a positive ROA over the long term to demonstrate effective asset utilization and profitability. The negative ROA in 2023 warrants further investigation into the factors influencing the company's financial performance and asset management strategies.
Peer comparison
Dec 31, 2023