Adjusted Ratios
Difficulty: Advanced
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Adjusted Ratios (Summary)
3M Co., adjusted ratios
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Activity | ||||||
| Total Asset Turnover | ||||||
| | Reported | 0.83 | 0.92 | 0.93 | 1.02 | 0.92 |
| | Adjusted | 0.82 | 0.90 | 0.91 | 1.03 | 0.92 |
| Liquidity | ||||||
| Current Ratio | ||||||
| | Reported | 1.86 | 1.89 | 1.54 | 1.96 | 1.70 |
| | Adjusted | 2.00 | 2.08 | 1.68 | 2.10 | 1.78 |
| Solvency | ||||||
| Debt to Equity | ||||||
| | Reported | 1.21 | 1.14 | 0.93 | 0.53 | 0.35 |
| | Adjusted | 1.25 | 1.16 | 0.94 | 0.61 | 0.38 |
| Debt to Capital | ||||||
| | Reported | 0.55 | 0.53 | 0.48 | 0.34 | 0.26 |
| | Adjusted | 0.56 | 0.54 | 0.48 | 0.38 | 0.27 |
| Financial Leverage | ||||||
| | Reported | 3.29 | 3.20 | 2.79 | 2.39 | 1.92 |
| | Adjusted | 3.21 | 3.10 | 2.65 | 2.43 | 1.83 |
| Profitability | ||||||
| Net Profit Margin | ||||||
| | Reported | 15.35% | 16.77% | 15.96% | 15.57% | 15.09% |
| | Adjusted | 16.89% | 13.77% | 15.79% | 7.63% | 17.27% |
| Return on Equity (ROE) | ||||||
| | Reported | 42.01% | 49.04% | 41.28% | 37.81% | 26.62% |
| | Adjusted | 44.34% | 38.53% | 38.19% | 19.17% | 29.11% |
| Return on Assets (ROA) | ||||||
| | Reported | 12.79% | 15.35% | 14.77% | 15.85% | 13.89% |
| | Adjusted | 13.82% | 12.44% | 14.39% | 7.88% | 15.88% |
| Ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | 3M Co.'s adjusted total asset turnover deteriorated from 2015 to 2016 and from 2016 to 2017. |
| Adjusted current ratio | A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. | 3M Co.'s adjusted current ratio improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017. |
| Adjusted debt-to-equity ratio | A solvency ratio calculated as adjusted total debt divided by adjusted total equity. | 3M Co.'s adjusted debt-to-equity ratio deteriorated from 2015 to 2016 and from 2016 to 2017. |
| Adjusted debt-to-capital ratio | A solvency ratio calculated as adjusted total debt divided by adjusted total debt plus adjusted total equity. | 3M Co.'s adjusted debt-to-capital ratio deteriorated from 2015 to 2016 and from 2016 to 2017. |
| Adjusted financial leverage | A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income. |
3M Co.'s adjusted financial leverage increased from 2015 to 2016 and from 2016 to 2017. |
| Adjusted net profit margin | An indicator of profitability, calculated as adjusted comprehensive income divided by total revenue. | 3M Co.'s adjusted net profit margin deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
| Adjusted ROE | A profitability ratio calculated as adjusted comprehensive income divided by adjusted total equity. | 3M Co.'s adjusted ROE improved from 2015 to 2016 and from 2016 to 2017. |
| Adjusted ROA | A profitability ratio calculated as adjusted comprehensive income divided by adjusted total assets. | 3M Co.'s adjusted ROA deteriorated from 2015 to 2016 but then improved from 2016 to 2017 not reaching 2015 level. |
Adjusted Total Asset Turnover
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Reported | ||||||
| Selected Financial Data (USD $ in millions) | ||||||
| | Net sales | 31,657 | 30,109 | 30,274 | 31,821 | 30,871 |
| | Total assets | 37,987 | 32,906 | 32,718 | 31,269 | 33,550 |
| Ratio | ||||||
| | Total asset turnover1 | 0.83 | 0.92 | 0.93 | 1.02 | 0.92 |
| Adjusted | ||||||
| Selected Financial Data (USD $ in millions) | ||||||
| | Adjusted net sales2 | 31,641 | 30,138 | 30,249 | 31,843 | 30,911 |
| | Adjusted total assets3 | 38,648 | 33,355 | 33,200 | 30,827 | 33,611 |
| Ratio | ||||||
| | Adjusted total asset turnover4 | 0.82 | 0.90 | 0.91 | 1.03 | 0.92 |
2017 Calculations
1 Total asset turnover = Net sales ÷ Total assets
= 31,657 ÷ 37,987 = 0.83
2 Adjusted net sales. See Details »
3 Adjusted total assets. See Details »
4 Adjusted total asset turnover = Adjusted net sales ÷ Adjusted total assets
= 31,641 ÷ 38,648 = 0.82
| Ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | 3M Co.'s adjusted total asset turnover deteriorated from 2015 to 2016 and from 2016 to 2017. |
Adjusted Current Ratio
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Reported | ||||||
| Selected Financial Data (USD $ in millions) | ||||||
| | Current assets | 14,277 | 11,726 | 10,986 | 11,765 | 12,733 |
| | Current liabilities | 7,687 | 6,219 | 7,118 | 5,998 | 7,498 |
| Ratio | ||||||
| | Current ratio1 | 1.86 | 1.89 | 1.54 | 1.96 | 1.70 |
| Adjusted | ||||||
| Selected Financial Data (USD $ in millions) | ||||||
| | Adjusted current assets2 | 14,380 | 11,814 | 11,077 | 11,415 | 12,335 |
| | Adjusted current liabilities3 | 7,174 | 5,668 | 6,600 | 5,423 | 6,940 |
| Ratio | ||||||
| | Adjusted current ratio4 | 2.00 | 2.08 | 1.68 | 2.10 | 1.78 |
2017 Calculations
1 Current ratio = Current assets ÷ Current liabilities
= 14,277 ÷ 7,687 = 1.86
2 Adjusted current assets. See Details »
3 Adjusted current liabilities. See Details »
4 Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= 14,380 ÷ 7,174 = 2.00
| Ratio | Description | The company |
|---|---|---|
| Adjusted current ratio | A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. | 3M Co.'s adjusted current ratio improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017. |
Adjusted Debt to Equity
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Reported | ||||||
| Selected Financial Data (USD $ in millions) | ||||||
| | Total debt | 14,009 | 11,695 | 10,843 | 6,896 | 6,067 |
| | Total 3M Company shareholders' equity | 11,563 | 10,298 | 11,708 | 13,109 | 17,502 |
| Ratio | ||||||
| | Debt to equity1 | 1.21 | 1.14 | 0.93 | 0.53 | 0.35 |
| Adjusted | ||||||
| Selected Financial Data (USD $ in millions) | ||||||
| | Adjusted total debt2 | 15,078 | 12,478 | 11,744 | 7,693 | 6,886 |
| | Adjusted total equity3 | 12,049 | 10,773 | 12,507 | 12,670 | 18,336 |
| Ratio | ||||||
| | Adjusted debt to equity4 | 1.25 | 1.16 | 0.94 | 0.61 | 0.38 |
2017 Calculations
1 Debt to equity = Total debt ÷ Total 3M Company shareholders' equity
= 14,009 ÷ 11,563 = 1.21
2 Adjusted total debt. See Details »
3 Adjusted total equity. See Details »
4 Adjusted debt to equity = Adjusted total debt ÷ Adjusted total equity
= 15,078 ÷ 12,049 = 1.25
| Ratio | Description | The company |
|---|---|---|
| Adjusted debt-to-equity ratio | A solvency ratio calculated as adjusted total debt divided by adjusted total equity. | 3M Co.'s adjusted debt-to-equity ratio deteriorated from 2015 to 2016 and from 2016 to 2017. |
Adjusted Debt to Capital
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Reported | ||||||
| Selected Financial Data (USD $ in millions) | ||||||
| | Total debt | 14,009 | 11,695 | 10,843 | 6,896 | 6,067 |
| | Total capital | 25,572 | 21,993 | 22,551 | 20,005 | 23,569 |
| Ratio | ||||||
| | Debt to capital1 | 0.55 | 0.53 | 0.48 | 0.34 | 0.26 |
| Adjusted | ||||||
| Selected Financial Data (USD $ in millions) | ||||||
| | Adjusted total debt2 | 15,078 | 12,478 | 11,744 | 7,693 | 6,886 |
| | Adjusted total capital3 | 27,127 | 23,251 | 24,251 | 20,363 | 25,222 |
| Ratio | ||||||
| | Adjusted debt to capital4 | 0.56 | 0.54 | 0.48 | 0.38 | 0.27 |
2017 Calculations
1 Debt to capital = Total debt ÷ Total capital
= 14,009 ÷ 25,572 = 0.55
2 Adjusted total debt. See Details »
3 Adjusted total capital. See Details »
4 Adjusted debt to capital = Adjusted total debt ÷ Adjusted total capital
= 15,078 ÷ 27,127 = 0.56
| Ratio | Description | The company |
|---|---|---|
| Adjusted debt-to-capital ratio | A solvency ratio calculated as adjusted total debt divided by adjusted total debt plus adjusted total equity. | 3M Co.'s adjusted debt-to-capital ratio deteriorated from 2015 to 2016 and from 2016 to 2017. |
Adjusted Financial Leverage
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Reported | ||||||
| Selected Financial Data (USD $ in millions) | ||||||
| | Total assets | 37,987 | 32,906 | 32,718 | 31,269 | 33,550 |
| | Total 3M Company shareholders' equity | 11,563 | 10,298 | 11,708 | 13,109 | 17,502 |
| Ratio | ||||||
| | Financial leverage1 | 3.29 | 3.20 | 2.79 | 2.39 | 1.92 |
| Adjusted | ||||||
| Selected Financial Data (USD $ in millions) | ||||||
| | Adjusted total assets2 | 38,648 | 33,355 | 33,200 | 30,827 | 33,611 |
| | Adjusted total equity3 | 12,049 | 10,773 | 12,507 | 12,670 | 18,336 |
| Ratio | ||||||
| | Adjusted financial leverage4 | 3.21 | 3.10 | 2.65 | 2.43 | 1.83 |
2017 Calculations
1 Financial leverage = Total assets ÷ Total 3M Company shareholders' equity
= 37,987 ÷ 11,563 = 3.29
2 Adjusted total assets. See Details »
3 Adjusted total equity. See Details »
4 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total equity
= 38,648 ÷ 12,049 = 3.21
| Ratio | Description | The company |
|---|---|---|
| Adjusted financial leverage | A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income. |
3M Co.'s adjusted financial leverage increased from 2015 to 2016 and from 2016 to 2017. |
Adjusted Net Profit Margin
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Reported | ||||||
| Selected Financial Data (USD $ in millions) | ||||||
| | Net income attributable to 3M | 4,858 | 5,050 | 4,833 | 4,956 | 4,659 |
| | Net sales | 31,657 | 30,109 | 30,274 | 31,821 | 30,871 |
| Ratio | ||||||
| | Net profit margin1 | 15.35% | 16.77% | 15.96% | 15.57% | 15.09% |
| Adjusted | ||||||
| Selected Financial Data (USD $ in millions) | ||||||
| | Adjusted comprehensive income including noncontrolling interest2 | 5,343 | 4,151 | 4,777 | 2,429 | 5,337 |
| | Adjusted net sales3 | 31,641 | 30,138 | 30,249 | 31,843 | 30,911 |
| Ratio | ||||||
| | Adjusted net profit margin4 | 16.89% | 13.77% | 15.79% | 7.63% | 17.27% |
2017 Calculations
1 Net profit margin = 100 × Net income attributable to 3M ÷ Net sales
= 100 × 4,858 ÷ 31,657 = 15.35%
2 Adjusted comprehensive income including noncontrolling interest. See Details »
3 Adjusted net sales. See Details »
4 Adjusted net profit margin = 100 × Adjusted comprehensive income including noncontrolling interest ÷ Adjusted net sales
= 100 × 5,343 ÷ 31,641 = 16.89%
| Ratio | Description | The company |
|---|---|---|
| Adjusted net profit margin | An indicator of profitability, calculated as adjusted comprehensive income divided by total revenue. | 3M Co.'s adjusted net profit margin deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
Adjusted Return on Equity (ROE)
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Reported | ||||||
| Selected Financial Data (USD $ in millions) | ||||||
| | Net income attributable to 3M | 4,858 | 5,050 | 4,833 | 4,956 | 4,659 |
| | Total 3M Company shareholders' equity | 11,563 | 10,298 | 11,708 | 13,109 | 17,502 |
| Ratio | ||||||
| | ROE1 | 42.01% | 49.04% | 41.28% | 37.81% | 26.62% |
| Adjusted | ||||||
| Selected Financial Data (USD $ in millions) | ||||||
| | Adjusted comprehensive income including noncontrolling interest2 | 5,343 | 4,151 | 4,777 | 2,429 | 5,337 |
| | Adjusted total equity3 | 12,049 | 10,773 | 12,507 | 12,670 | 18,336 |
| Ratio | ||||||
| | Adjusted ROE4 | 44.34% | 38.53% | 38.19% | 19.17% | 29.11% |
2017 Calculations
1 ROE = 100 × Net income attributable to 3M ÷ Total 3M Company shareholders' equity
= 100 × 4,858 ÷ 11,563 = 42.01%
2 Adjusted comprehensive income including noncontrolling interest. See Details »
3 Adjusted total equity. See Details »
4 Adjusted ROE = 100 × Adjusted comprehensive income including noncontrolling interest ÷ Adjusted total equity
= 100 × 5,343 ÷ 12,049 = 44.34%
| Ratio | Description | The company |
|---|---|---|
| Adjusted ROE | A profitability ratio calculated as adjusted comprehensive income divided by adjusted total equity. | 3M Co.'s adjusted ROE improved from 2015 to 2016 and from 2016 to 2017. |
Adjusted Return on Assets (ROA)
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Reported | ||||||
| Selected Financial Data (USD $ in millions) | ||||||
| | Net income attributable to 3M | 4,858 | 5,050 | 4,833 | 4,956 | 4,659 |
| | Total assets | 37,987 | 32,906 | 32,718 | 31,269 | 33,550 |
| Ratio | ||||||
| | ROA1 | 12.79% | 15.35% | 14.77% | 15.85% | 13.89% |
| Adjusted | ||||||
| Selected Financial Data (USD $ in millions) | ||||||
| | Adjusted comprehensive income including noncontrolling interest2 | 5,343 | 4,151 | 4,777 | 2,429 | 5,337 |
| | Adjusted total assets3 | 38,648 | 33,355 | 33,200 | 30,827 | 33,611 |
| Ratio | ||||||
| | Adjusted ROA4 | 13.82% | 12.44% | 14.39% | 7.88% | 15.88% |
2017 Calculations
1 ROA = 100 × Net income attributable to 3M ÷ Total assets
= 100 × 4,858 ÷ 37,987 = 12.79%
2 Adjusted comprehensive income including noncontrolling interest. See Details »
3 Adjusted total assets. See Details »
4 Adjusted ROA = 100 × Adjusted comprehensive income including noncontrolling interest ÷ Adjusted total assets
= 100 × 5,343 ÷ 38,648 = 13.82%
| Ratio | Description | The company |
|---|---|---|
| Adjusted ROA | A profitability ratio calculated as adjusted comprehensive income divided by adjusted total assets. | 3M Co.'s adjusted ROA deteriorated from 2015 to 2016 but then improved from 2016 to 2017 not reaching 2015 level. |