3M Company (MMM)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 39,868,000 | 50,580,000 | 46,455,000 | 47,072,000 | 47,344,000 |
| Total stockholders’ equity | US$ in thousands | 3,842,000 | 4,807,000 | 14,722,000 | 15,046,000 | 12,867,000 |
| Financial leverage ratio | 10.38 | 10.52 | 3.16 | 3.13 | 3.68 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $39,868,000K ÷ $3,842,000K
= 10.38
The financial leverage ratio, which measures the extent to which a company relies on debt to finance its operations and growth, shows fluctuations in 3M Company's capital structure over the years.
3M's financial leverage ratio decreased from 3.68 in December 2020 to 3.13 in December 2021, indicating a reduction in the company's dependence on debt. However, the ratio slightly increased to 3.16 by December 2022.
There was a significant jump in the financial leverage ratio to 10.52 by December 2023, followed by a slight decrease to 10.38 by December 2024. This substantial increase in leverage in 2023 suggests that 3M likely took on a significant amount of debt relative to its equity during that year.
Overall, the fluctuations in the financial leverage ratio over the years reflect changes in 3M's capital structure and its use of debt as a financing source. It is essential for stakeholders to monitor these trends to assess the company's risk profile and financial stability.
Peer comparison
Dec 31, 2024