3M Company (MMM)
Return on total capital
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -8,744,000 | -9,406,000 | -2,618,000 | 6,446,000 | 6,851,000 | 7,817,000 | 5,456,000 | 7,333,000 | 7,694,000 | 7,861,000 | 7,935,000 | 7,665,000 | 7,299,000 | 6,767,000 | 6,888,000 | 6,651,000 | 6,132,000 | 6,626,000 | 6,603,000 | 7,483,000 |
| Long-term debt | US$ in thousands | 13,088,000 | 12,876,000 | 12,954,000 | 12,948,000 | 14,001,000 | 13,849,000 | 14,019,000 | 14,801,000 | 16,056,000 | 16,193,000 | 16,267,000 | 16,819,000 | 17,989,000 | 18,429,000 | 19,276,000 | 19,247,000 | 17,518,000 | 17,479,000 | 14,914,000 | 15,580,000 |
| Total stockholders’ equity | US$ in thousands | 4,807,000 | 4,672,000 | 7,798,000 | 15,298,000 | 14,722,000 | 14,080,000 | 13,742,000 | 14,930,000 | 15,046,000 | 14,460,000 | 14,448,000 | 13,760,000 | 12,867,000 | 11,880,000 | 10,857,000 | 10,147,000 | 10,063,000 | 10,702,000 | 10,083,000 | 9,703,000 |
| Return on total capital | -48.86% | -53.60% | -12.62% | 22.82% | 23.85% | 27.99% | 19.65% | 24.66% | 24.74% | 25.65% | 25.83% | 25.07% | 23.66% | 22.33% | 22.86% | 22.63% | 22.23% | 23.51% | 26.42% | 29.60% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-8,744,000K ÷ ($13,088,000K + $4,807,000K)
= -48.86%
3M Co.'s return on total capital has fluctuated over the last eight quarters, as per the provided data. The return on total capital was negative in Q4 2023 and Q3 2023, indicating that the company's capital was not generating satisfactory returns during these periods. This is a concerning sign as it implies that the company's capital investments may not have been efficient.
In Q2 2023, the return on total capital improved but remained in negative territory at -22.56%, indicating some progress compared to the previous two quarters. However, it suggests that 3M Co. still faced challenges in generating returns on the total capital invested.
The return on total capital turned positive in Q1 2023, standing at 11.83%. This improvement is a positive sign, indicating that the company's capital investments started to generate returns above the cost of capital.
Looking back at the data from the previous quarters, 3M Co. had a consistently positive return on total capital in Q4 2022, Q3 2022, Q2 2022, and Q1 2022. However, the returns showed a decreasing trend during these quarters, indicating a potential decline in the company's ability to generate returns on its total capital.
Overall, the data suggests that 3M Co. experienced challenges in generating satisfactory returns on its total capital in recent quarters, with noticeable fluctuations and a mix of negative and positive returns. Further analysis is recommended to understand the underlying factors contributing to these fluctuations and to assess the company's capital allocation strategies and operational performance.
Peer comparison
Dec 31, 2023