Analysis of Solvency Ratios
Beginner level
Solvency ratios also known as long-term debt ratios measure a company’s ability to meet long-term obligations.
Solvency Ratios (Summary)
3M Co., solvency ratios
Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11).
| Solvency 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 2017 to 2018 and from 2018 to 2019. |
| Debt to equity ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity. | 3M Co.’s debt to equity ratio (including operating lease liability) deteriorated from 2017 to 2018 and from 2018 to 2019. |
| 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 2017 to 2018 and from 2018 to 2019. |
| Debt to capital ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity. | 3M Co.’s debt to capital ratio (including operating lease liability) deteriorated from 2017 to 2018 and from 2018 to 2019. |
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | 3M Co.’s debt to assets ratio deteriorated from 2017 to 2018 and from 2018 to 2019. |
| Debt to assets ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total assets. | 3M Co.’s debt to assets ratio (including operating lease liability) deteriorated from 2017 to 2018 and from 2018 to 2019. |
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | 3M Co.’s financial leverage ratio increased from 2017 to 2018 and from 2018 to 2019. |
| Solvency 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 2017 to 2018 and from 2018 to 2019. |
| Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | 3M Co.’s fixed charge coverage ratio deteriorated from 2017 to 2018 and from 2018 to 2019. |
Debt to Equity
3M Co., debt to equity calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings and current portion of long-term debt | 2,795 | 1,211 | 1,853 | 972 | 2,044 | |
| Long-term debt, excluding current portion | 17,518 | 13,411 | 12,096 | 10,678 | 8,753 | |
| Total debt | 20,313 | 14,622 | 13,949 | 11,650 | 10,797 | |
| Total 3M Company shareholders’ equity | 10,063 | 9,796 | 11,563 | 10,298 | 11,708 | |
| Solvency Ratio | ||||||
| Debt to equity1 | 2.02 | 1.49 | 1.21 | 1.13 | 0.92 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| General Electric Co. | 3.21 | 3.55 | 2.09 | 1.80 | 2.02 | |
| Honeywell International Inc. | 0.87 | 0.89 | 1.04 | 0.81 | 0.66 | |
| Debt to Equity, Sector | ||||||
| General Industrials | 2.24 | 2.39 | 1.79 | 1.55 | 1.72 | |
| Debt to Equity, Industry | ||||||
| Industrials | 1.89 | 1.88 | 1.61 | 1.46 | 1.47 | |
Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11).
1 2019 Calculation
Debt to equity = Total debt ÷ Total 3M Company shareholders’ equity
= 20,313 ÷ 10,063 = 2.02
2 Click competitor name to see calculations.
| Solvency 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 2017 to 2018 and from 2018 to 2019. |
Debt to Equity (including Operating Lease Liability)
3M Co., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings and current portion of long-term debt | 2,795 | 1,211 | 1,853 | 972 | 2,044 | |
| Long-term debt, excluding current portion | 17,518 | 13,411 | 12,096 | 10,678 | 8,753 | |
| Total debt | 20,313 | 14,622 | 13,949 | 11,650 | 10,797 | |
| Operating lease liabilities, current | 247 | — | — | — | — | |
| Operating lease liabilities, non-current | 607 | — | — | — | — | |
| Total debt (including operating lease liability) | 21,167 | 14,622 | 13,949 | 11,650 | 10,797 | |
| Total 3M Company shareholders’ equity | 10,063 | 9,796 | 11,563 | 10,298 | 11,708 | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 2.10 | 1.49 | 1.21 | 1.13 | 0.92 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| General Electric Co. | 3.32 | 3.55 | 2.09 | 1.80 | 2.02 | |
| Honeywell International Inc. | 0.90 | 0.89 | 1.04 | 0.81 | 0.66 | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| General Industrials | 2.32 | 2.39 | 1.79 | 1.55 | 1.72 | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Industrials | 2.00 | 1.88 | 1.61 | 1.46 | 1.47 | |
Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11).
1 2019 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total 3M Company shareholders’ equity
= 21,167 ÷ 10,063 = 2.10
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity. | 3M Co.’s debt to equity ratio (including operating lease liability) deteriorated from 2017 to 2018 and from 2018 to 2019. |
Debt to Capital
3M Co., debt to capital calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings and current portion of long-term debt | 2,795 | 1,211 | 1,853 | 972 | 2,044 | |
| Long-term debt, excluding current portion | 17,518 | 13,411 | 12,096 | 10,678 | 8,753 | |
| Total debt | 20,313 | 14,622 | 13,949 | 11,650 | 10,797 | |
| Total 3M Company shareholders’ equity | 10,063 | 9,796 | 11,563 | 10,298 | 11,708 | |
| Total capital | 30,376 | 24,418 | 25,512 | 21,948 | 22,505 | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.67 | 0.60 | 0.55 | 0.53 | 0.48 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| General Electric Co. | 0.76 | 0.78 | 0.68 | 0.64 | 0.67 | |
| Honeywell International Inc. | 0.46 | 0.47 | 0.51 | 0.45 | 0.40 | |
| Debt to Capital, Sector | ||||||
| General Industrials | 0.69 | 0.70 | 0.64 | 0.61 | 0.63 | |
| Debt to Capital, Industry | ||||||
| Industrials | 0.65 | 0.65 | 0.62 | 0.59 | 0.59 | |
Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11).
1 2019 Calculation
Debt to capital = Total debt ÷ Total capital
= 20,313 ÷ 30,376 = 0.67
2 Click competitor name to see calculations.
| Solvency 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 2017 to 2018 and from 2018 to 2019. |
Debt to Capital (including Operating Lease Liability)
3M Co., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings and current portion of long-term debt | 2,795 | 1,211 | 1,853 | 972 | 2,044 | |
| Long-term debt, excluding current portion | 17,518 | 13,411 | 12,096 | 10,678 | 8,753 | |
| Total debt | 20,313 | 14,622 | 13,949 | 11,650 | 10,797 | |
| Operating lease liabilities, current | 247 | — | — | — | — | |
| Operating lease liabilities, non-current | 607 | — | — | — | — | |
| Total debt (including operating lease liability) | 21,167 | 14,622 | 13,949 | 11,650 | 10,797 | |
| Total 3M Company shareholders’ equity | 10,063 | 9,796 | 11,563 | 10,298 | 11,708 | |
| Total capital (including operating lease liability) | 31,230 | 24,418 | 25,512 | 21,948 | 22,505 | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.68 | 0.60 | 0.55 | 0.53 | 0.48 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| General Electric Co. | 0.77 | 0.78 | 0.68 | 0.64 | 0.67 | |
| Honeywell International Inc. | 0.47 | 0.47 | 0.51 | 0.45 | 0.40 | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| General Industrials | 0.70 | 0.70 | 0.64 | 0.61 | 0.63 | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.67 | 0.65 | 0.62 | 0.59 | 0.59 | |
Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11).
1 2019 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 21,167 ÷ 31,230 = 0.68
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to capital ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity. | 3M Co.’s debt to capital ratio (including operating lease liability) deteriorated from 2017 to 2018 and from 2018 to 2019. |
Debt to Assets
3M Co., debt to assets calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings and current portion of long-term debt | 2,795 | 1,211 | 1,853 | 972 | 2,044 | |
| Long-term debt, excluding current portion | 17,518 | 13,411 | 12,096 | 10,678 | 8,753 | |
| Total debt | 20,313 | 14,622 | 13,949 | 11,650 | 10,797 | |
| Total assets | 44,659 | 36,500 | 37,987 | 32,906 | 32,718 | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.45 | 0.40 | 0.37 | 0.35 | 0.33 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| General Electric Co. | 0.34 | 0.36 | 0.36 | 0.37 | 0.40 | |
| Honeywell International Inc. | 0.27 | 0.28 | 0.30 | 0.29 | 0.24 | |
| Debt to Assets, Sector | ||||||
| General Industrials | 0.34 | 0.35 | 0.35 | 0.36 | 0.38 | |
| Debt to Assets, Industry | ||||||
| Industrials | 0.32 | 0.32 | 0.32 | 0.30 | 0.32 | |
Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11).
1 2019 Calculation
Debt to assets = Total debt ÷ Total assets
= 20,313 ÷ 44,659 = 0.45
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | 3M Co.’s debt to assets ratio deteriorated from 2017 to 2018 and from 2018 to 2019. |
Debt to Assets (including Operating Lease Liability)
3M Co., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings and current portion of long-term debt | 2,795 | 1,211 | 1,853 | 972 | 2,044 | |
| Long-term debt, excluding current portion | 17,518 | 13,411 | 12,096 | 10,678 | 8,753 | |
| Total debt | 20,313 | 14,622 | 13,949 | 11,650 | 10,797 | |
| Operating lease liabilities, current | 247 | — | — | — | — | |
| Operating lease liabilities, non-current | 607 | — | — | — | — | |
| Total debt (including operating lease liability) | 21,167 | 14,622 | 13,949 | 11,650 | 10,797 | |
| Total assets | 44,659 | 36,500 | 37,987 | 32,906 | 32,718 | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.47 | 0.40 | 0.37 | 0.35 | 0.33 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| General Electric Co. | 0.35 | 0.36 | 0.36 | 0.37 | 0.40 | |
| Honeywell International Inc. | 0.28 | 0.28 | 0.30 | 0.29 | 0.24 | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| General Industrials | 0.36 | 0.35 | 0.35 | 0.36 | 0.38 | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.34 | 0.32 | 0.32 | 0.30 | 0.32 | |
Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11).
1 2019 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 21,167 ÷ 44,659 = 0.47
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to assets ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total assets. | 3M Co.’s debt to assets ratio (including operating lease liability) deteriorated from 2017 to 2018 and from 2018 to 2019. |
Financial Leverage
3M Co., financial leverage calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 44,659 | 36,500 | 37,987 | 32,906 | 32,718 | |
| Total 3M Company shareholders’ equity | 10,063 | 9,796 | 11,563 | 10,298 | 11,708 | |
| Solvency Ratio | ||||||
| Financial leverage1 | 4.44 | 3.73 | 3.29 | 3.20 | 2.79 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| General Electric Co. | 9.40 | 9.98 | 5.88 | 4.82 | 5.01 | |
| Honeywell International Inc. | 3.17 | 3.18 | 3.44 | 2.80 | 2.70 | |
| Financial Leverage, Sector | ||||||
| General Industrials | 6.49 | 6.84 | 5.11 | 4.29 | 4.48 | |
| Financial Leverage, Industry | ||||||
| Industrials | 5.90 | 5.81 | 5.06 | 4.79 | 4.60 | |
Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11).
1 2019 Calculation
Financial leverage = Total assets ÷ Total 3M Company shareholders’ equity
= 44,659 ÷ 10,063 = 4.44
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | 3M Co.’s financial leverage ratio increased from 2017 to 2018 and from 2018 to 2019. |
Interest Coverage
3M Co., interest coverage calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to 3M | 4,570 | 5,349 | 4,858 | 5,050 | 4,833 | |
| Add: Net income attributable to noncontrolling interest | 12 | 14 | 11 | 8 | 8 | |
| Add: Income tax expense | 1,130 | 1,637 | 2,679 | 1,995 | 1,982 | |
| Add: Interest expense | 448 | 350 | 322 | 199 | 149 | |
| Earnings before interest and tax (EBIT) | 6,160 | 7,350 | 7,870 | 7,252 | 6,972 | |
| Solvency Ratio | ||||||
| Interest coverage1 | 13.75 | 21.00 | 24.44 | 36.44 | 46.79 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| General Electric Co. | 1.27 | -2.98 | -0.81 | 2.80 | 3.36 | |
| Honeywell International Inc. | 22.17 | 21.40 | 22.84 | 20.07 | 22.25 | |
| Interest Coverage, Sector | ||||||
| General Industrials | 3.87 | 0.02 | 2.03 | 5.05 | 6.51 | |
| Interest Coverage, Industry | ||||||
| Industrials | 6.83 | 6.39 | 7.42 | 7.94 | 10.49 | |
Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11).
1 2019 Calculation
Interest coverage = EBIT ÷ Interest expense
= 6,160 ÷ 448 = 13.75
2 Click competitor name to see calculations.
| Solvency 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 2017 to 2018 and from 2018 to 2019. |
Fixed Charge Coverage
3M Co., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to 3M | 4,570 | 5,349 | 4,858 | 5,050 | 4,833 | |
| Add: Net income attributable to noncontrolling interest | 12 | 14 | 11 | 8 | 8 | |
| Add: Income tax expense | 1,130 | 1,637 | 2,679 | 1,995 | 1,982 | |
| Add: Interest expense | 448 | 350 | 322 | 199 | 149 | |
| Earnings before interest and tax (EBIT) | 6,160 | 7,350 | 7,870 | 7,252 | 6,972 | |
| Add: Operating lease cost | 308 | 393 | 343 | 318 | 316 | |
| Earnings before fixed charges and tax | 6,468 | 7,743 | 8,213 | 7,570 | 7,288 | |
| Interest expense | 448 | 350 | 322 | 199 | 149 | |
| Operating lease cost | 308 | 393 | 343 | 318 | 316 | |
| Fixed charges | 756 | 743 | 665 | 517 | 465 | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 8.56 | 10.42 | 12.35 | 14.64 | 15.67 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| General Electric Co. | 1.09 | -1.77 | -0.30 | 2.07 | 2.74 | |
| Honeywell International Inc. | 14.06 | 11.30 | 10.85 | 9.89 | 10.41 | |
| Fixed Charge Coverage, Sector | ||||||
| General Industrials | 2.89 | 0.31 | 1.60 | 3.53 | 4.69 | |
| Fixed Charge Coverage, Industry | ||||||
| Industrials | 4.72 | 4.21 | 4.74 | 5.03 | 6.36 | |
Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11).
1 2019 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 6,468 ÷ 756 = 8.56
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | 3M Co.’s fixed charge coverage ratio deteriorated from 2017 to 2018 and from 2018 to 2019. |