3M Company (MMM)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 5,689,000 | 5,984,000 | 2,116,000 | -8,435,000 | -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 |
| Interest expense (ttm) | US$ in thousands | 1,235,000 | 1,354,000 | 1,382,000 | 1,204,000 | 942,000 | 686,000 | 488,000 | 472,000 | 462,000 | 465,000 | 476,000 | 469,000 | 488,000 | 511,000 | 522,000 | 538,000 | 529,000 | 512,000 | 493,000 | 467,000 |
| Interest coverage | 4.61 | 4.42 | 1.53 | -7.01 | -9.28 | -13.71 | -5.36 | 13.66 | 14.83 | 16.81 | 11.46 | 15.64 | 15.77 | 15.38 | 15.20 | 14.25 | 13.80 | 13.22 | 13.97 | 14.24 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $5,689,000K ÷ $1,235,000K
= 4.61
The interest coverage ratio of 3M Company has fluctuated over the past few years. It remained relatively stable between the first quarter of 2020 and the second quarter of 2022, ranging from 13.22 to 15.77. This indicates that the company's ability to cover its interest expenses with its earnings was healthy during this period.
However, a significant drop in the interest coverage ratio was observed in the third quarter of 2022, falling to 11.46. This suggests a potential decrease in the company's earning capacity relative to its interest obligations.
Further deterioration in the interest coverage ratio was noted from the second quarter of 2023 onwards, with the ratio turning negative. This negative trend continued until at least the third quarter of 2024, indicating a concerning situation where the company's earnings are insufficient to cover its interest expenses.
Overall, the trend in the interest coverage ratio for 3M Company suggests a period of strength followed by a notable decline, potentially indicating financial strain and a need for closer scrutiny of the company's financial performance and debt management practices.
Peer comparison
Dec 31, 2024