3M Company (MMM)
Interest coverage
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 |
Interest expense (ttm) | US$ in thousands | 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 | 448,000 | 419,000 | 395,000 | 372,000 |
Interest coverage | -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 | 13.69 | 15.81 | 16.72 | 20.12 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-8,744,000K ÷ $942,000K
= -9.28
The interest coverage ratio for 3M Co. has been volatile over the past eight quarters, ranging from as low as -19.21 in Q3 2023 to a high of 16.01 in Q1 2022. An interest coverage ratio below 1 indicates that the company is not generating enough earnings to cover its interest expenses, which could be a cause for concern. The negative values in Q3 and Q4 of 2023 suggest that the company's earnings were insufficient to cover its interest payments during those periods, indicating potential financial distress. However, the positive values in the preceding quarters indicate that the company was able to comfortably meet its interest obligations.
Overall, the significant fluctuations in 3M Co.'s interest coverage ratio raise questions about the company's ability to manage its debt and generate sustainable earnings. Further scrutiny and analysis of the company's financial performance and debt structure are warranted to assess its financial health accurately.
Peer comparison
Dec 31, 2023