Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
3M Co., solvency ratios
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The financial data reveals notable trends in leverage and coverage ratios over the five-year period ending in 2021. Overall, there is evidence of fluctuations in debt-related metrics, accompanied by changes in the company’s ability to cover interest and fixed charges.
- Debt to Equity Ratios
- Both the standard debt to equity ratio and the version including operating lease liabilities exhibit an initial upward trend from 2017 to 2019, peaking in 2019 with values of 2.03 and 2.12 respectively. Following this peak, these ratios decline over the next two years, reaching 1.16 and 1.22 in 2021. This pattern suggests an increase in leverage during the early period and a subsequent reduction in debt reliance relative to equity.
- Debt to Capital Ratios
- Consistent with the debt to equity ratios, the debt to capital measures (both standard and including operating lease liability) rise from 0.55 in 2017 to around 0.67-0.68 in 2019, then decrease to approximately 0.54-0.55 by 2021. This indicates a similar shift in the capital structure, with debt becoming less dominant after 2019.
- Debt to Assets Ratios
- The debt to assets ratios follow a comparable trend, peaking at 0.46 (standard) and 0.48 (including operating leases) in 2019 before falling back to 0.37 and 0.39 by 2021. This decrease reflects a reduction in total liabilities relative to total assets in the latter part of the period.
- Financial Leverage
- The financial leverage ratio increases from 3.29 in 2017 to a high of 4.44 in 2019, then decreases to 3.13 by 2021. This suggests that the company’s reliance on borrowed funds in relation to equity has been reduced after reaching a maximum in 2019.
- Interest Coverage
- Interest coverage, an indicator of the ability to meet interest payments, declines markedly from 24.44 in 2017 to 13.75 in 2019 and remains relatively stable around 13.68 in 2020, before improving to 15.78 in 2021. The overall decrease points to a reduced margin of safety in covering interest expenses during the middle years, with slight recovery in the final year.
- Fixed Charge Coverage
- Fixed charge coverage ratios show a downward trend from 12.35 in 2017 to 8.56 in 2019. A modest increase follows through 2020 and 2021, ending at 9.94. This indicates some improvement in the capacity to cover fixed obligations after a period of weakening coverage.
In summary, the analyzed ratios indicate that leverage increased significantly up to 2019, followed by a reduction through 2021. Correspondingly, coverage ratios weakened as leverage rose but show signs of recovery in the most recent year. These trends highlight a cycle of increased risk exposure with subsequent moderate de-risking and improved financial resilience.
Debt Ratios
Coverage Ratios
Debt to Equity
3M Co., debt to equity calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings and current portion of long-term debt | 1,307) | 806) | 2,795) | 1,211) | 1,853) | |
| Current obligations of finance leases | 7) | 22) | 21) | 17) | 13) | |
| Long-term debt, excluding current portion | 16,056) | 17,989) | 17,518) | 13,411) | 12,096) | |
| Finance leases, net of current obligations | 93) | 93) | 111) | 75) | 60) | |
| Total debt | 17,463) | 18,910) | 20,445) | 14,714) | 14,022) | |
| Total 3M Company shareholders’ equity | 15,046) | 12,867) | 10,063) | 9,796) | 11,563) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 1.16 | 1.47 | 2.03 | 1.50 | 1.21 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 2.29 | 2.42 | — | — | — | |
| Eaton Corp. plc | 0.52 | 0.54 | — | — | — | |
| GE Aerospace | 0.87 | 2.11 | — | — | — | |
| Honeywell International Inc. | 1.06 | 1.28 | — | — | — | |
| Lockheed Martin Corp. | 1.07 | 2.02 | — | — | — | |
| RTX Corp. | 0.43 | 0.44 | — | — | — | |
| Debt to Equity, Sector | ||||||
| Capital Goods | 1.26 | 1.75 | — | — | — | |
| Debt to Equity, Industry | ||||||
| Industrials | 1.37 | 1.82 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity = Total debt ÷ Total 3M Company shareholders’ equity
= 17,463 ÷ 15,046 = 1.16
2 Click competitor name to see calculations.
- Total debt
- The total debt exhibited an initial increase from 14,022 million US dollars at the end of 2017 to 14,714 million in 2018. This was followed by a more substantial rise to 20,445 million in 2019. Subsequently, there was a decline in 2020 to 18,910 million and a continued decrease to 17,463 million by the end of 2021, indicating a reduction in debt levels after peaking in 2019.
- Total 3M Company shareholders’ equity
- Shareholders’ equity showed a decline from 11,563 million US dollars at the close of 2017 to 9,796 million in 2018. It then experienced modest growth to 10,063 million in 2019. A more pronounced increase followed in the next two years, with equity reaching 12,867 million in 2020 and further rising to 15,046 million by the end of 2021. This trend suggests strengthening equity capital, especially from 2019 onwards.
- Debt to equity ratio
- The debt to equity ratio increased sharply from 1.21 in 2017 to 1.50 in 2018 and peaked at 2.03 in 2019, primarily driven by the significant rise in total debt coupled with relatively stagnant equity. After 2019, this ratio declined to 1.47 in 2020 and further to 1.16 in 2021, reflecting the reduction in total debt alongside the rising equity base, which improved the company's leverage position over the last two years of the period reviewed.
Debt to Equity (including Operating Lease Liability)
3M Co., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings and current portion of long-term debt | 1,307) | 806) | 2,795) | 1,211) | 1,853) | |
| Current obligations of finance leases | 7) | 22) | 21) | 17) | 13) | |
| Long-term debt, excluding current portion | 16,056) | 17,989) | 17,518) | 13,411) | 12,096) | |
| Finance leases, net of current obligations | 93) | 93) | 111) | 75) | 60) | |
| Total debt | 17,463) | 18,910) | 20,445) | 14,714) | 14,022) | |
| Current operating lease liabilities | 263) | 256) | 247) | —) | —) | |
| Noncurrent operating lease liabilities | 591) | 609) | 607) | —) | —) | |
| Total debt (including operating lease liability) | 18,317) | 19,775) | 21,299) | 14,714) | 14,022) | |
| Total 3M Company shareholders’ equity | 15,046) | 12,867) | 10,063) | 9,796) | 11,563) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 1.22 | 1.54 | 2.12 | 1.50 | 1.21 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 2.33 | 2.46 | — | — | — | |
| Eaton Corp. plc | 0.55 | 0.57 | — | — | — | |
| GE Aerospace | 0.94 | 2.20 | — | — | — | |
| Honeywell International Inc. | 1.11 | 1.32 | — | — | — | |
| Lockheed Martin Corp. | 1.19 | 2.21 | — | — | — | |
| RTX Corp. | 0.46 | 0.47 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Capital Goods | 1.32 | 1.81 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Industrials | 1.54 | 2.00 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total 3M Company shareholders’ equity
= 18,317 ÷ 15,046 = 1.22
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- The total debt increased significantly from 14,022 million USD at the end of 2017 to a peak of 21,299 million USD at the end of 2019. Subsequently, it decreased in the following years, reaching 18,317 million USD by the end of 2021. This pattern indicates an initial phase of increased borrowing, followed by a reduction in debt levels towards the latest period.
- Total Shareholders’ Equity
- Shareholders’ equity exhibited some volatility but an overall upward trend over the period. It decreased from 11,563 million USD in 2017 to 9,796 million USD in 2018, then marginally improved to 10,063 million USD in 2019. From 2019 onwards, equity increased substantially, reaching 12,867 million USD in 2020 and 15,046 million USD by the end of 2021, reflecting strengthening financial position or retained earnings growth.
- Debt to Equity Ratio (Including Operating Lease Liability)
- The debt to equity ratio rose sharply from 1.21 in 2017 to 2.12 in 2019, indicating a period where liabilities grew faster than equity, increasing financial leverage. After 2019, the ratio declined to 1.54 in 2020 and further to 1.22 in 2021, approaching the initial levels observed in 2017. This trend suggests an improvement in capital structure, with either debt reduction, equity increase, or a combination of both contributing to decreased leverage risk.
Debt to Capital
3M Co., debt to capital calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings and current portion of long-term debt | 1,307) | 806) | 2,795) | 1,211) | 1,853) | |
| Current obligations of finance leases | 7) | 22) | 21) | 17) | 13) | |
| Long-term debt, excluding current portion | 16,056) | 17,989) | 17,518) | 13,411) | 12,096) | |
| Finance leases, net of current obligations | 93) | 93) | 111) | 75) | 60) | |
| Total debt | 17,463) | 18,910) | 20,445) | 14,714) | 14,022) | |
| Total 3M Company shareholders’ equity | 15,046) | 12,867) | 10,063) | 9,796) | 11,563) | |
| Total capital | 32,509) | 31,777) | 30,508) | 24,510) | 25,585) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.54 | 0.60 | 0.67 | 0.60 | 0.55 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Boeing Co. | 1.35 | 1.40 | — | — | — | |
| Caterpillar Inc. | 0.70 | 0.71 | — | — | — | |
| Eaton Corp. plc | 0.34 | 0.35 | — | — | — | |
| GE Aerospace | 0.47 | 0.68 | — | — | — | |
| Honeywell International Inc. | 0.51 | 0.56 | — | — | — | |
| Lockheed Martin Corp. | 0.52 | 0.67 | — | — | — | |
| RTX Corp. | 0.30 | 0.31 | — | — | — | |
| Debt to Capital, Sector | ||||||
| Capital Goods | 0.56 | 0.64 | — | — | — | |
| Debt to Capital, Industry | ||||||
| Industrials | 0.58 | 0.65 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital = Total debt ÷ Total capital
= 17,463 ÷ 32,509 = 0.54
2 Click competitor name to see calculations.
The analysis of the annual financial data highlights several notable trends in the capital structure and debt levels over the five-year period.
- Total Debt
- Total debt exhibited an overall increasing trend from 2017 to 2019, rising significantly from 14,022 million US dollars in 2017 to a peak of 20,445 million in 2019. Following this peak, total debt decreased in the subsequent two years, falling to 18,910 million in 2020 and further declining to 17,463 million in 2021. This pattern indicates a strategy of accumulating debt up to 2019, followed by deleveraging efforts in 2020 and 2021.
- Total Capital
- Total capital remained relatively stable with some growth over the period. Starting at 25,585 million US dollars in 2017, it slightly decreased in 2018 to 24,510 million before increasing to 30,508 million in 2019. The upward trend continued with total capital reaching 31,777 million in 2020 and further increasing to 32,509 million in 2021. This consistent increase from 2018 onwards suggests an expansion of the company's capital base, potentially through equity financing or retained earnings.
- Debt to Capital Ratio
- The debt to capital ratio reflected the fluctuations in debt and capital. Beginning at 0.55 in 2017, the ratio increased to 0.60 in 2018 and peaked at 0.67 in 2019, aligning with the peak in total debt and reflecting higher leverage. Subsequently, the ratio declined to 0.60 in 2020 and decreased further to 0.54 in 2021. This reduction indicates improved capital structure with lower reliance on debt financing relative to total capital in the latter years.
Overall, the data illustrates a period of rising leverage culminating in 2019, followed by efforts to strengthen the capital structure through both reducing debt and increasing total capital. The decrease in the debt to capital ratio in 2020 and 2021 supports the interpretation of a more conservative financial stance in recent years.
Debt to Capital (including Operating Lease Liability)
3M Co., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings and current portion of long-term debt | 1,307) | 806) | 2,795) | 1,211) | 1,853) | |
| Current obligations of finance leases | 7) | 22) | 21) | 17) | 13) | |
| Long-term debt, excluding current portion | 16,056) | 17,989) | 17,518) | 13,411) | 12,096) | |
| Finance leases, net of current obligations | 93) | 93) | 111) | 75) | 60) | |
| Total debt | 17,463) | 18,910) | 20,445) | 14,714) | 14,022) | |
| Current operating lease liabilities | 263) | 256) | 247) | —) | —) | |
| Noncurrent operating lease liabilities | 591) | 609) | 607) | —) | —) | |
| Total debt (including operating lease liability) | 18,317) | 19,775) | 21,299) | 14,714) | 14,022) | |
| Total 3M Company shareholders’ equity | 15,046) | 12,867) | 10,063) | 9,796) | 11,563) | |
| Total capital (including operating lease liability) | 33,363) | 32,642) | 31,362) | 24,510) | 25,585) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.55 | 0.61 | 0.68 | 0.60 | 0.55 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | 1.34 | 1.39 | — | — | — | |
| Caterpillar Inc. | 0.70 | 0.71 | — | — | — | |
| Eaton Corp. plc | 0.36 | 0.36 | — | — | — | |
| GE Aerospace | 0.49 | 0.69 | — | — | — | |
| Honeywell International Inc. | 0.53 | 0.57 | — | — | — | |
| Lockheed Martin Corp. | 0.54 | 0.69 | — | — | — | |
| RTX Corp. | 0.31 | 0.32 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Capital Goods | 0.57 | 0.64 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.61 | 0.67 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 18,317 ÷ 33,363 = 0.55
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- The total debt showed an upward trend from 2017 to 2019, increasing from 14,022 million US dollars to a peak of 21,299 million US dollars. This was followed by a decline over the next two years, reaching 18,317 million US dollars by the end of 2021. The debt level decreased notably after 2019, indicating a reduction in leverage or debt repayment activity during that period.
- Total Capital (Including Operating Lease Liability)
- Total capital experienced fluctuations but overall demonstrated a growth trend during the period. Starting at 25,585 million US dollars in 2017, it declined slightly in 2018 but rose significantly in 2019 and continued to increase gradually through 2021, ending at 33,363 million US dollars. This growth suggests an expansion in the overall capitalization base.
- Debt to Capital Ratio (Including Operating Lease Liability)
- The debt to capital ratio rose from 0.55 in 2017 to its highest point of 0.68 in 2019, reflecting a heightened proportion of debt relative to total capital. After this peak, the ratio decreased steadily to 0.55 by the end of 2021. This decline indicates improved capital structure management, with a reduced reliance on debt financing over the last two years of the observed period.
Debt to Assets
3M Co., debt to assets calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings and current portion of long-term debt | 1,307) | 806) | 2,795) | 1,211) | 1,853) | |
| Current obligations of finance leases | 7) | 22) | 21) | 17) | 13) | |
| Long-term debt, excluding current portion | 16,056) | 17,989) | 17,518) | 13,411) | 12,096) | |
| Finance leases, net of current obligations | 93) | 93) | 111) | 75) | 60) | |
| Total debt | 17,463) | 18,910) | 20,445) | 14,714) | 14,022) | |
| Total assets | 47,072) | 47,344) | 44,659) | 36,500) | 37,987) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.37 | 0.40 | 0.46 | 0.40 | 0.37 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Boeing Co. | 0.42 | 0.42 | — | — | — | |
| Caterpillar Inc. | 0.46 | 0.47 | — | — | — | |
| Eaton Corp. plc | 0.25 | 0.25 | — | — | — | |
| GE Aerospace | 0.18 | 0.30 | — | — | — | |
| Honeywell International Inc. | 0.30 | 0.35 | — | — | — | |
| Lockheed Martin Corp. | 0.23 | 0.24 | — | — | — | |
| RTX Corp. | 0.20 | 0.20 | — | — | — | |
| Debt to Assets, Sector | ||||||
| Capital Goods | 0.28 | 0.32 | — | — | — | |
| Debt to Assets, Industry | ||||||
| Industrials | 0.30 | 0.33 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets = Total debt ÷ Total assets
= 17,463 ÷ 47,072 = 0.37
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited an increasing trend from 2017 to 2019, rising from approximately 14 billion to over 20 billion US dollars. Following this peak in 2019, there was a gradual reduction in total debt, decreasing to around 17.5 billion US dollars by the end of 2021. This pattern indicates an initial phase of increased leverage followed by a period of debt reduction.
- Total Assets
- Total assets showed variability over the analyzed period. Assets decreased slightly from nearly 38 billion US dollars in 2017 to 36.5 billion in 2018. Subsequently, assets increased significantly, reaching approximately 44.7 billion in 2019 and further climbing to 47.3 billion in 2020. In 2021, assets remained relatively stable, with a minor slight decrease to about 47.1 billion. Overall, the asset base expanded considerably over the five-year period.
- Debt to Assets Ratio
- The debt to assets ratio reflects changes in both debt levels and asset base. This ratio increased steadily from 0.37 in 2017 to a peak of 0.46 in 2019, indicating a growing proportion of debt relative to assets during this period. After 2019, the ratio declined to 0.4 in 2020 and further to 0.37 in 2021, returning to the 2017 level. This trend highlights a cycle of increased leverage followed by deleveraging and improved balance sheet strength.
Debt to Assets (including Operating Lease Liability)
3M Co., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings and current portion of long-term debt | 1,307) | 806) | 2,795) | 1,211) | 1,853) | |
| Current obligations of finance leases | 7) | 22) | 21) | 17) | 13) | |
| Long-term debt, excluding current portion | 16,056) | 17,989) | 17,518) | 13,411) | 12,096) | |
| Finance leases, net of current obligations | 93) | 93) | 111) | 75) | 60) | |
| Total debt | 17,463) | 18,910) | 20,445) | 14,714) | 14,022) | |
| Current operating lease liabilities | 263) | 256) | 247) | —) | —) | |
| Noncurrent operating lease liabilities | 591) | 609) | 607) | —) | —) | |
| Total debt (including operating lease liability) | 18,317) | 19,775) | 21,299) | 14,714) | 14,022) | |
| Total assets | 47,072) | 47,344) | 44,659) | 36,500) | 37,987) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.39 | 0.42 | 0.48 | 0.40 | 0.37 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | 0.43 | 0.43 | — | — | — | |
| Caterpillar Inc. | 0.46 | 0.48 | — | — | — | |
| Eaton Corp. plc | 0.27 | 0.27 | — | — | — | |
| GE Aerospace | 0.19 | 0.31 | — | — | — | |
| Honeywell International Inc. | 0.32 | 0.36 | — | — | — | |
| Lockheed Martin Corp. | 0.26 | 0.26 | — | — | — | |
| RTX Corp. | 0.21 | 0.21 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Capital Goods | 0.29 | 0.33 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.34 | 0.36 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 18,317 ÷ 47,072 = 0.39
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- The total debt exhibited an upward trend from 2017 through 2019, increasing significantly from approximately $14.0 billion to $21.3 billion. Following this peak in 2019, the company began to reduce its debt, with values declining to roughly $19.8 billion in 2020 and further to $18.3 billion in 2021. This pattern suggests a strategic effort to deleverage after a period of substantial borrowing.
- Total Assets
- Total assets showed fluctuations over the observed period. From 2017 to 2018, assets decreased slightly from about $38.0 billion to $36.5 billion. Subsequently, assets increased markedly in 2019 to $44.7 billion and continued growing to $47.3 billion in 2020, before a slight decline to $47.1 billion in 2021. The upward movement in assets from 2018 onwards indicates possible acquisitions, investments, or operational expansions, although the minor dip in 2021 may imply some asset disposals or depreciation effects.
- Debt to Assets Ratio (Including Operating Lease Liability)
- The debt-to-assets ratio increased from 0.37 in 2017 to a peak of 0.48 in 2019, reflecting a higher proportion of debt relative to assets during that year. Following 2019, the ratio decreased to 0.42 in 2020 and further to 0.39 in 2021. This decline aligns with the reduction in total debt and suggests an improvement in the company's leverage position, indicating a potentially more conservative capital structure in the later years.
Financial Leverage
3M Co., financial leverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 47,072) | 47,344) | 44,659) | 36,500) | 37,987) | |
| Total 3M Company shareholders’ equity | 15,046) | 12,867) | 10,063) | 9,796) | 11,563) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 3.13 | 3.68 | 4.44 | 3.73 | 3.29 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 5.02 | 5.11 | — | — | — | |
| Eaton Corp. plc | 2.07 | 2.13 | — | — | — | |
| GE Aerospace | 4.93 | 7.13 | — | — | — | |
| Honeywell International Inc. | 3.47 | 3.68 | — | — | — | |
| Lockheed Martin Corp. | 4.64 | 8.43 | — | — | — | |
| RTX Corp. | 2.21 | 2.25 | — | — | — | |
| Financial Leverage, Sector | ||||||
| Capital Goods | 4.55 | 5.54 | — | — | — | |
| Financial Leverage, Industry | ||||||
| Industrials | 4.52 | 5.49 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Financial leverage = Total assets ÷ Total 3M Company shareholders’ equity
= 47,072 ÷ 15,046 = 3.13
2 Click competitor name to see calculations.
- Total Assets
- The total assets showed a fluctuating pattern over the five-year period. Initially, there was a slight decline from 37,987 million USD in 2017 to 36,500 million USD in 2018. This was followed by a noticeable increase to 44,659 million USD in 2019 and continued growth to 47,344 million USD in 2020, before experiencing a minor decrease to 47,072 million USD in 2021. Overall, total assets demonstrated growth compared to the initial year, particularly after 2018.
- Total Shareholders’ Equity
- The shareholders' equity experienced variation with an overall upward trend. Starting at 11,563 million USD in 2017, it declined to 9,796 million USD in 2018 but then rebounded to 10,063 million USD in 2019. Thereafter, there was a significant increase to 12,867 million USD in 2020 and a further rise to 15,046 million USD in 2021. The equity level in 2021 was the highest in the observed period, indicating strengthening capital base.
- Financial Leverage
- The financial leverage ratio exhibited volatility throughout the timeline. It increased notably from 3.29 in 2017 to a peak of 4.44 in 2019, suggesting greater reliance on debt relative to equity during that year. Post-2019, the ratio declined to 3.68 in 2020 and further decreased to 3.13 in 2021, representing a reduction in leveraging and possibly a move toward a more conservative capital structure.
Interest Coverage
3M Co., interest coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to 3M | 5,921) | 5,384) | 4,570) | 5,349) | 4,858) | |
| Add: Net income attributable to noncontrolling interest | 8) | 4) | 12) | 14) | 11) | |
| Add: Income tax expense | 1,285) | 1,318) | 1,130) | 1,637) | 2,679) | |
| Add: Interest expense | 488) | 529) | 448) | 350) | 322) | |
| Earnings before interest and tax (EBIT) | 7,702) | 7,235) | 6,160) | 7,350) | 7,870) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 15.78 | 13.68 | 13.75 | 21.00 | 24.44 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Boeing Co. | -0.88 | -5.71 | — | — | — | |
| Caterpillar Inc. | 17.88 | 8.80 | — | — | — | |
| Eaton Corp. plc | 21.11 | 12.72 | — | — | — | |
| GE Aerospace | -0.96 | 2.59 | — | — | — | |
| Honeywell International Inc. | 22.09 | 17.75 | — | — | — | |
| Lockheed Martin Corp. | 14.27 | 14.93 | — | — | — | |
| RTX Corp. | 4.71 | -0.65 | — | — | — | |
| Interest Coverage, Sector | ||||||
| Capital Goods | 3.98 | 1.99 | — | — | — | |
| Interest Coverage, Industry | ||||||
| Industrials | 5.14 | 1.25 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Interest coverage = EBIT ÷ Interest expense
= 7,702 ÷ 488 = 15.78
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT demonstrated a declining trend from 2017 to 2019, decreasing from $7,870 million to $6,160 million. However, a recovery phase is observed starting in 2020, with EBIT rising to $7,235 million and further increasing to $7,702 million by the end of 2021.
- Interest expense
- Interest expense showed an upward trend from 2017 through 2020, rising from $322 million to $529 million. In 2021, there was a slight decrease to $488 million, indicating some reduction in interest-related costs.
- Interest coverage
- The interest coverage ratio declined significantly over the period from 2017 at 24.44 to a low of 13.68 in 2020, reflecting reduced earnings relative to interest expense. A moderate improvement occurred in 2021, increasing to 15.78, suggesting a better ability to cover interest obligations despite not returning to earlier levels.
Fixed Charge Coverage
3M Co., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to 3M | 5,921) | 5,384) | 4,570) | 5,349) | 4,858) | |
| Add: Net income attributable to noncontrolling interest | 8) | 4) | 12) | 14) | 11) | |
| Add: Income tax expense | 1,285) | 1,318) | 1,130) | 1,637) | 2,679) | |
| Add: Interest expense | 488) | 529) | 448) | 350) | 322) | |
| Earnings before interest and tax (EBIT) | 7,702) | 7,235) | 6,160) | 7,350) | 7,870) | |
| Add: Operating lease cost | 319) | 348) | 308) | 393) | 343) | |
| Earnings before fixed charges and tax | 8,021) | 7,583) | 6,468) | 7,743) | 8,213) | |
| Interest expense | 488) | 529) | 448) | 350) | 322) | |
| Operating lease cost | 319) | 348) | 308) | 393) | 343) | |
| Fixed charges | 807) | 877) | 756) | 743) | 665) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 9.94 | 8.65 | 8.56 | 10.42 | 12.35 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Boeing Co. | -0.64 | -4.75 | — | — | — | |
| Caterpillar Inc. | 12.73 | 6.58 | — | — | — | |
| Eaton Corp. plc | 10.40 | 6.24 | — | — | — | |
| GE Aerospace | -0.22 | 1.93 | — | — | — | |
| Honeywell International Inc. | 13.67 | 11.49 | — | — | — | |
| Lockheed Martin Corp. | 9.95 | 11.12 | — | — | — | |
| RTX Corp. | 3.66 | -0.22 | — | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Capital Goods | 3.06 | 1.66 | — | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Industrials | 3.44 | 1.12 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 8,021 ÷ 807 = 9.94
2 Click competitor name to see calculations.
- Earnings Before Fixed Charges and Tax
- The earnings before fixed charges and tax exhibit a fluctuating trend over the five-year period. Starting at 8,213 million US dollars in 2017, there is a decline to 7,743 million in 2018 and a more pronounced drop to 6,468 million in 2019. The figure recovers somewhat thereafter, rising to 7,583 million in 2020 and 8,021 million in 2021, approaching the initial 2017 level but not exceeding it.
- Fixed Charges
- Fixed charges have generally increased from 665 million US dollars in 2017 to 877 million in 2020, indicating rising obligations in terms of interest and other fixed financial expenses. There is a slight reduction observed in 2021, with fixed charges decreasing to 807 million. Overall, the trend indicates rising fixed financial commitments followed by a modest decline.
- Fixed Charge Coverage Ratio
- The fixed charge coverage ratio, which measures the ability to cover fixed charges, shows a declining trend from a high of 12.35 in 2017 to a low of 8.56 in 2019, reflecting a reduced capacity to cover fixed charges during this period. The ratio improves marginally in 2020 to 8.65 and continues to rise to 9.94 in 2021, suggesting an improving but still lower than the initial period capacity to meet fixed charges relative to earnings.