3M Company (MMM)

Return on equity (ROE)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	US$ in thousands	4,173,000	-6,995,000	5,777,000	5,921,000	5,449,000
Total stockholders’ equity	US$ in thousands	3,842,000	4,807,000	14,722,000	15,046,000	12,867,000
ROE		108.62%	-145.52%	39.24%	39.35%	42.35%

December 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $4,173,000K ÷ $3,842,000K
= 108.62%

Analyzing 3M Company's return on equity (ROE) over the past five years, we observe the following trends:

1. In December 31, 2020, the ROE was 42.35%, indicating that the company generated a healthy return for its shareholders relative to its equity base.

2. By December 31, 2021, the ROE slightly decreased to 39.35%, which may suggest a minor decline in the company's efficiency in leveraging shareholder equity to generate profits.

3. The trend continued into December 31, 2022, with the ROE decreasing further to 39.24%. This trend indicates the need for the company to assess its operational efficiency and profitability.

4. A significant concern arises in December 31, 2023, where the ROE dramatically dropped to -145.52%. This negative ROE indicates that 3M Company incurred a net loss for the year, surpassing its equity base. This requires a thorough investigation into the company's financial performance during this period.

5. However, by December 31, 2024, the ROE rebounded impressively to 108.62%, signifying a substantial improvement in the company's ability to generate profits relative to its equity.

In conclusion, while 3M Company demonstrated robust ROE figures in the majority of the years analyzed, the sharp decline in 2023 raises concerns about its operational efficiency and financial performance during that period. Management should closely monitor and address factors contributing to such fluctuations to sustain and enhance shareholder value in the future.