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.