3M Co. (MMM)
Long-term Debt and Solvency Analysis
Difficulty: Beginner
Solvency ratios also known as long-term debt ratios measure a company’s ability to meet long-term obligations.
Ratios (Summary)
3M Co., debt and solvency ratios
Based on: 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), 10-K (filing date: 2015-02-12).
| 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 2016 to 2017 and from 2017 to 2018. |
| 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 2016 to 2017 and from 2017 to 2018. |
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | 3M Co.’s debt to assets ratio deteriorated from 2016 to 2017 and from 2017 to 2018. |
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | 3M Co.’s financial leverage ratio deteriorated from 2016 to 2017 and from 2017 to 2018. |
| 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 2016 to 2017 and from 2017 to 2018. |
| 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 2016 to 2017 and from 2017 to 2018. |
Debt to Equity
3M Co., debt to equity calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings and current portion of long-term debt | 1,211 | 1,853 | 972 | 2,044 | 106 | |
| Long-term debt, excluding current portion | 13,411 | 12,096 | 10,678 | 8,753 | 6,731 | |
| Capital lease obligations | 75 | 60 | 45 | 46 | 59 | |
| Total debt | 14,697 | 14,009 | 11,695 | 10,843 | 6,896 | |
| Total 3M Company shareholders’ equity | 9,796 | 11,563 | 10,298 | 11,708 | 13,109 | |
| Ratio | ||||||
| Debt to equity1 | 1.50 | 1.21 | 1.14 | 0.93 | 0.53 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Danaher Corp. | 0.35 | 0.40 | 0.53 | 0.54 | 0.15 | |
| General Electric Co. | 3.55 | 2.09 | 1.80 | 2.02 | 2.85 | |
| Honeywell International Inc. | 0.89 | 1.04 | 0.81 | 0.66 | 0.49 | |
| Debt to Equity, Sector | ||||||
| General Industrials | 1.73 | 1.48 | 1.37 | 1.54 | 2.11 | |
| Debt to Equity, Industry | ||||||
| Industrials | 1.51 | 1.36 | 1.31 | 1.30 | 1.50 | |
Based on: 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), 10-K (filing date: 2015-02-12).
1 2018 Calculation
Debt to equity = Total debt ÷ Total 3M Company shareholders’ equity
= 14,697 ÷ 9,796 = 1.50
2 Click competitor name to see calculations.
| 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 2016 to 2017 and from 2017 to 2018. |
Debt to Capital
3M Co., debt to capital calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings and current portion of long-term debt | 1,211 | 1,853 | 972 | 2,044 | 106 | |
| Long-term debt, excluding current portion | 13,411 | 12,096 | 10,678 | 8,753 | 6,731 | |
| Capital lease obligations | 75 | 60 | 45 | 46 | 59 | |
| Total debt | 14,697 | 14,009 | 11,695 | 10,843 | 6,896 | |
| Total 3M Company shareholders’ equity | 9,796 | 11,563 | 10,298 | 11,708 | 13,109 | |
| Total capital | 24,493 | 25,572 | 21,993 | 22,551 | 20,005 | |
| Ratio | ||||||
| Debt to capital1 | 0.60 | 0.55 | 0.53 | 0.48 | 0.34 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Danaher Corp. | 0.26 | 0.29 | 0.35 | 0.35 | 0.13 | |
| General Electric Co. | 0.78 | 0.68 | 0.64 | 0.67 | 0.74 | |
| Honeywell International Inc. | 0.47 | 0.51 | 0.45 | 0.40 | 0.33 | |
| Debt to Capital, Sector | ||||||
| General Industrials | 0.63 | 0.60 | 0.58 | 0.61 | 0.68 | |
| Debt to Capital, Industry | ||||||
| Industrials | 0.60 | 0.58 | 0.57 | 0.56 | 0.60 | |
Based on: 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), 10-K (filing date: 2015-02-12).
1 2018 Calculation
Debt to capital = Total debt ÷ Total capital
= 14,697 ÷ 24,493 = 0.60
2 Click competitor name to see calculations.
| 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 2016 to 2017 and from 2017 to 2018. |
Debt to Assets
3M Co., debt to assets calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings and current portion of long-term debt | 1,211 | 1,853 | 972 | 2,044 | 106 | |
| Long-term debt, excluding current portion | 13,411 | 12,096 | 10,678 | 8,753 | 6,731 | |
| Capital lease obligations | 75 | 60 | 45 | 46 | 59 | |
| Total debt | 14,697 | 14,009 | 11,695 | 10,843 | 6,896 | |
| Total assets | 36,500 | 37,987 | 32,906 | 32,718 | 31,269 | |
| Ratio | ||||||
| Debt to assets1 | 0.40 | 0.37 | 0.36 | 0.33 | 0.22 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Danaher Corp. | 0.20 | 0.23 | 0.27 | 0.27 | 0.09 | |
| General Electric Co. | 0.36 | 0.36 | 0.37 | 0.40 | 0.56 | |
| Honeywell International Inc. | 0.28 | 0.30 | 0.29 | 0.24 | 0.19 | |
| Debt to Assets, Sector | ||||||
| General Industrials | 0.33 | 0.34 | 0.35 | 0.38 | 0.50 | |
| Debt to Assets, Industry | ||||||
| Industrials | 0.31 | 0.31 | 0.30 | 0.31 | 0.37 | |
Based on: 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), 10-K (filing date: 2015-02-12).
1 2018 Calculation
Debt to assets = Total debt ÷ Total assets
= 14,697 ÷ 36,500 = 0.40
2 Click competitor name to see calculations.
| 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 2016 to 2017 and from 2017 to 2018. |
Financial Leverage
3M Co., financial leverage calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 36,500 | 37,987 | 32,906 | 32,718 | 31,269 | |
| Total 3M Company shareholders’ equity | 9,796 | 11,563 | 10,298 | 11,708 | 13,109 | |
| Ratio | ||||||
| Financial leverage1 | 3.73 | 3.29 | 3.20 | 2.79 | 2.39 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Danaher Corp. | 1.70 | 1.77 | 1.97 | 2.04 | 1.58 | |
| General Electric Co. | 9.98 | 5.88 | 4.82 | 5.01 | 5.06 | |
| Honeywell International Inc. | 3.18 | 3.44 | 2.80 | 2.70 | 2.57 | |
| Financial Leverage, Sector | ||||||
| General Industrials | 5.18 | 4.37 | 3.87 | 4.10 | 4.18 | |
| Financial Leverage, Industry | ||||||
| Industrials | 4.86 | 4.45 | 4.36 | 4.19 | 4.03 | |
Based on: 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), 10-K (filing date: 2015-02-12).
1 2018 Calculation
Financial leverage = Total assets ÷ Total 3M Company shareholders’ equity
= 36,500 ÷ 9,796 = 3.73
2 Click competitor name to see calculations.
| 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 deteriorated from 2016 to 2017 and from 2017 to 2018. |
Interest Coverage
3M Co., interest coverage calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to 3M | 5,349 | 4,858 | 5,050 | 4,833 | 4,956 | |
| Add: Net income attributable to noncontrolling interest | 14 | 11 | 8 | 8 | 42 | |
| Add: Income tax expense | 1,637 | 2,679 | 1,995 | 1,982 | 2,028 | |
| Add: Interest expense | 350 | 322 | 199 | 149 | 142 | |
| Earnings before interest and tax (EBIT) | 7,350 | 7,870 | 7,252 | 6,972 | 7,168 | |
| Ratio | ||||||
| Interest coverage1 | 21.00 | 24.44 | 36.44 | 46.79 | 50.48 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Danaher Corp. | 21.92 | 19.06 | 15.16 | 21.42 | 29.38 | |
| General Electric Co. | -2.98 | -0.81 | 2.80 | 3.36 | 2.82 | |
| Honeywell International Inc. | 21.40 | 22.84 | 20.07 | 22.25 | 19.30 | |
| Interest Coverage, Sector | ||||||
| General Industrials | 0.60 | 2.52 | 5.38 | 7.10 | 4.33 | |
| Interest Coverage, Industry | ||||||
| Industrials | 7.01 | 7.95 | 8.24 | 10.83 | 7.76 | |
Based on: 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), 10-K (filing date: 2015-02-12).
1 2018 Calculation
Interest coverage = EBIT ÷ Interest expense
= 7,350 ÷ 350 = 21.00
2 Click competitor name to see calculations.
| 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 2016 to 2017 and from 2017 to 2018. |
Fixed Charge Coverage
3M Co., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to 3M | 5,349 | 4,858 | 5,050 | 4,833 | 4,956 | |
| Add: Net income attributable to noncontrolling interest | 14 | 11 | 8 | 8 | 42 | |
| Add: Income tax expense | 1,637 | 2,679 | 1,995 | 1,982 | 2,028 | |
| Add: Interest expense | 350 | 322 | 199 | 149 | 142 | |
| Earnings before interest and tax (EBIT) | 7,350 | 7,870 | 7,252 | 6,972 | 7,168 | |
| Add: Rental expense under operating leases | 393 | 343 | 318 | 316 | 332 | |
| Earnings before fixed charges and tax | 7,743 | 8,213 | 7,570 | 7,288 | 7,500 | |
| Interest expense | 350 | 322 | 199 | 149 | 142 | |
| Rental expense under operating leases | 393 | 343 | 318 | 316 | 332 | |
| Fixed charges | 743 | 665 | 517 | 465 | 474 | |
| Ratio | ||||||
| Fixed charge coverage1 | 10.42 | 12.35 | 14.64 | 15.67 | 15.82 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Danaher Corp. | 8.49 | 8.14 | 7.46 | 8.84 | 10.82 | |
| General Electric Co. | -1.77 | -0.30 | 2.07 | 2.74 | 2.58 | |
| Honeywell International Inc. | 11.30 | 10.85 | 9.89 | 10.41 | 8.88 | |
| Fixed Charge Coverage, Sector | ||||||
| General Industrials | 0.69 | 1.90 | 3.70 | 4.97 | 3.69 | |
| Fixed Charge Coverage, Industry | ||||||
| Industrials | 4.19 | 4.60 | 4.79 | 5.89 | 5.14 | |
Based on: 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), 10-K (filing date: 2015-02-12).
1 2018 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 7,743 ÷ 743 = 10.42
2 Click competitor name to see calculations.
| 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 2016 to 2017 and from 2017 to 2018. |