3M Company (MMM)
Return on equity (ROE)
| 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 stockholders’ equity | US$ in thousands | 4,807,000 | 14,722,000 | 15,046,000 | 12,867,000 | 10,063,000 |
| ROE | -145.52% | 39.24% | 39.35% | 42.35% | 44.89% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $-6,995,000K ÷ $4,807,000K
= -145.52%
3M Co.'s return on equity (ROE) has experienced significant fluctuations over the past five years. The ROE for 2023 is notably negative at -145.52%, indicating that the company's net income for that year was insufficient to cover shareholder equity, resulting in a loss. In contrast, the ROE for the previous two years (2022 and 2021) was positive at 39.23% and 39.35% respectively, suggesting that the company was generating a respectable return for its shareholders during those periods.
However, there has been a downward trend in ROE since 2020 when it stood at 41.84%, followed by a decline to 45.41% in 2019. This trend may raise concerns about the company's profitability and efficiency in utilizing equity to generate profit.
The sharp decrease in ROE in 2023 raises questions about the company's financial health and operational effectiveness during that year. Further analysis of the financial statements and factors impacting profitability would be necessary to determine the reasons behind this negative ROE and assess the company's future prospects.
Peer comparison
Dec 31, 2023