3M Company (MMM)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 50,580,000 | 46,455,000 | 47,072,000 | 47,344,000 | 44,659,000 |
| Total stockholders’ equity | US$ in thousands | 4,807,000 | 14,722,000 | 15,046,000 | 12,867,000 | 10,063,000 |
| Financial leverage ratio | 10.52 | 3.16 | 3.13 | 3.68 | 4.44 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $50,580,000K ÷ $4,807,000K
= 10.52
The financial leverage ratio for 3M Co. has shown significant fluctuations over the past five years. In 2023, the ratio stands at 10.52, indicating a substantial increase from the previous year's ratio of 3.16 in 2022. This surge suggests that the company's reliance on debt to finance its operations has spiked significantly.
Comparing the 2023 figure to the ratios from 2021, 2020, and 2019 reveals a notable deviation from the trend observed in those years. The ratio was relatively stable around 3.13 to 4.44 during this period, showing a moderate level of financial leverage. However, the sudden jump in 2023 raises concerns about the company's debt management and potential risks associated with higher leverage levels.
Further analysis and examination of 3M Co.'s financial statements and debt structure are warranted to understand the reasons behind the sharp increase in the financial leverage ratio in 2023 and to assess the company's overall financial health and risk profile.
Peer comparison
Dec 31, 2023