Microsoft Excel LibreOffice Calc

Long-term Debt and Solvency Analysis

Difficulty: Beginner


Ratios (Summary)

3M Co., debt and solvency ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Debt to equity 1.21 1.14 0.93 0.53 0.35
Debt to capital 0.55 0.53 0.48 0.34 0.26
Interest coverage 24.44 36.44 46.79 50.48 46.26

Based on: 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-12), 10-K (filing date: 2014-02-13).

Ratio Description The company
Debt-to-equity ratio A solvency ratio calculated as total debt divided by total shareholders' equity. 3M Co.'s debt-to-equity ratio deteriorated from 2015 to 2016 and from 2016 to 2017.
Debt-to-capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders' equity. 3M Co.'s debt-to-capital ratio deteriorated from 2015 to 2016 and from 2016 to 2017.

Ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. 3M Co.'s interest coverage ratio deteriorated from 2015 to 2016 and from 2016 to 2017.

Debt to Equity

3M Co., debt to equity calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Short-term borrowings and current portion of long-term debt 1,853  972  2,044  106  1,683 
Long-term debt, excluding current portion 12,096  10,678  8,753  6,731  4,326 
Capital lease obligations 60  45  46  59  58 
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
Benchmarks
Debt to Equity, Competitors
Danaher Corp. 0.40 0.53 0.54 0.15 0.16
General Electric Co. 2.09 1.80 2.02 2.85 2.93
Honeywell International Inc. 1.04 0.81 0.66 0.49 0.51
Debt to Equity, Sector
General Industrials 1.48 1.37 1.54 2.11 2.14
Debt to Equity, Industry
Industrials 1.36 1.31 1.30 1.50 1.39

Based on: 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-12), 10-K (filing date: 2014-02-13).

2017 Calculations

1 Debt to equity = Total debt ÷ Total 3M Company shareholders' equity
= 14,009 ÷ 11,563 = 1.21

Ratio Description The company
Debt-to-equity ratio A solvency ratio calculated as total debt divided by total shareholders' equity. 3M Co.'s debt-to-equity ratio deteriorated from 2015 to 2016 and from 2016 to 2017.

Debt to Capital

3M Co., debt to capital calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Short-term borrowings and current portion of long-term debt 1,853  972  2,044  106  1,683 
Long-term debt, excluding current portion 12,096  10,678  8,753  6,731  4,326 
Capital lease obligations 60  45  46  59  58 
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 
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
Benchmarks
Debt to Capital, Competitors
Danaher Corp. 0.29 0.35 0.35 0.13 0.14
General Electric Co. 0.68 0.64 0.67 0.74 0.75
Honeywell International Inc. 0.51 0.45 0.40 0.33 0.34
Debt to Capital, Sector
General Industrials 0.60 0.58 0.61 0.68 0.68
Debt to Capital, Industry
Industrials 0.58 0.57 0.56 0.60 0.58

Based on: 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-12), 10-K (filing date: 2014-02-13).

2017 Calculations

1 Debt to capital = Total debt ÷ Total capital
= 14,009 ÷ 25,572 = 0.55

Ratio Description The company
Debt-to-capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders' equity. 3M Co.'s debt-to-capital ratio deteriorated from 2015 to 2016 and from 2016 to 2017.

Interest Coverage

3M Co., interest coverage calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Net income attributable to 3M 4,858  5,050  4,833  4,956  4,659 
Add: Net income attributable to noncontrolling interest 11  42  62 
Add: Income tax expense 2,679  1,995  1,982  2,028  1,841 
Add: Interest expense 322  199  149  142  145 
Earnings before interest and tax (EBIT) 7,870  7,252  6,972  7,168  6,707 
Ratio
Interest coverage1 24.44 36.44 46.79 50.48 46.26
Benchmarks
Interest Coverage, Competitors
Danaher Corp. 19.06 15.16 21.42 29.38 25.44
General Electric Co. -0.81 2.80 3.36 2.82 2.60
Honeywell International Inc. 22.84 20.07 22.25 19.30 17.55
Interest Coverage, Sector
General Industrials 2.52 5.38 7.10 4.33 3.95
Interest Coverage, Industry
Industrials 7.95 8.24 10.83 7.76 7.15

Based on: 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-12), 10-K (filing date: 2014-02-13).

2017 Calculations

1 Interest coverage = EBIT ÷ Interest expense
= 7,870 ÷ 322 = 24.44

Ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. 3M Co.'s interest coverage ratio deteriorated from 2015 to 2016 and from 2016 to 2017.