3M Company (MMM)

Interest coverage

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	4,822,000	-8,744,000	6,851,000	7,694,000	7,315,000
Interest expense	US$ in thousands	472,000	942,000	462,000	488,000	529,000
Interest coverage		10.22	-9.28	14.83	15.77	13.83

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $4,822,000K ÷ $472,000K
= 10.22

3M Company's interest coverage ratio has been consistently healthy over the past few years, indicating the company's ability to meet its interest obligations comfortably. The interest coverage ratio increased from 13.83 in December 2020 to 15.77 in December 2021, reflecting an improvement in the company's ability to cover its interest expenses with operating income.

In December 2022, the interest coverage ratio remained strong at 14.83, suggesting that 3M Company continued to have a comfortable cushion to handle its interest payments.

However, there was a significant decline in the interest coverage ratio to -9.28 in December 2023, indicating that the company's operating income was insufficient to cover its interest expenses during that period.

Subsequently, the interest coverage ratio improved to 10.22 in December 2024, but it still remained below the levels seen in the earlier years.

Overall, while 3M Company has shown a strong ability to cover its interest obligations in most years, the negative ratio in December 2023 raises concerns about the company's financial health during that particular period. Continued monitoring of the interest coverage ratio will be essential to assess the company's ability to service its debt obligations effectively.