Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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- Income Statement
- Statement of Comprehensive Income
- Cash Flow Statement
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Price to Book Value (P/BV) since 2005
- Aggregate Accruals
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Long-term Activity Ratios (Summary)
3M Co., long-term (investment) activity ratios
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset) | ||||||
| Total asset turnover | ||||||
| Equity turnover |
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).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio exhibited slight fluctuations during the period. It increased from 3.57 in 2017 to 3.75 in 2018, reflecting improved efficiency in using net fixed assets to generate sales. However, it declined to 3.44 in 2019 and remained relatively stable around 3.42 in 2020, before recovering to 3.75 in 2021. This pattern suggests variability in asset utilization efficiency, with a notable rebound in the most recent year.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- This adjusted measure, which accounts for operating lease assets, showed a similar trend but with generally lower values compared to the standard net fixed asset turnover. It remained constant at 3.57 and 3.75 in 2017 and 2018, respectively, but then declined more significantly to 3.15 in 2019 and 3.13 in 2020. The ratio increased again in 2021, reaching 3.44. The inclusion of right-of-use assets appears to moderate the turnover ratio, reflecting changes in leased asset utilization.
- Total Asset Turnover
- The total asset turnover ratio demonstrated a general downward trend from 0.83 in 2017 to 0.68 in 2020, indicating a decreasing efficiency in generating sales from total assets. There was a modest recovery to 0.75 in 2021, though it remained below earlier levels. This decline and partial rebound suggest challenges in asset usage effectiveness over the period.
- Equity Turnover
- Equity turnover experienced an increase from 2.74 in 2017 to a peak of 3.34 in 2018, signaling enhanced sales generation relative to shareholder equity. Subsequent years saw a decline to 3.19 in 2019 and further decreases to 2.5 in 2020 and 2.35 in 2021. The downward trend after 2018 points to diminishing efficiency in employing equity for sales generation, with the lowest point recorded in 2021.
Net Fixed Asset Turnover
3M Co., net fixed asset turnover 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 sales | ||||||
| Property, plant and equipment, net | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Net Fixed Asset Turnover, Sector | ||||||
| Capital Goods | ||||||
| Net Fixed Asset Turnover, Industry | ||||||
| Industrials | ||||||
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
Net fixed asset turnover = Net sales ÷ Property, plant and equipment, net
= ÷ =
2 Click competitor name to see calculations.
- Net Sales
- Net sales experienced a generally positive trend over the period analyzed. Starting at 31,657 million US dollars in 2017, sales increased to 32,765 million in 2018, followed by a slight decline to 32,136 million in 2019. The figure remained relatively stable in 2020 at 32,184 million, before rising significantly to 35,355 million in 2021. This indicates resilience during 2020 and growth momentum in the most recent year.
- Property, Plant and Equipment, Net
- The net value of property, plant, and equipment showed minor fluctuations with a moderate overall increase. The value decreased slightly from 8,866 million US dollars in 2017 to 8,738 million in 2018, then increased to 9,333 million in 2019. It continued to rise marginally to 9,421 million in 2020 and remained nearly flat at 9,429 million in 2021. This suggests a generally stable asset base with moderate investment or depreciation balancing out across the years.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio, reflecting efficiency in using fixed assets to generate sales, exhibited some volatility. The ratio increased from 3.57 in 2017 to 3.75 in 2018, indicating improved asset utilization. However, it declined in 2019 to 3.44 and remained relatively unchanged in 2020 at 3.42, signaling reduced efficiency during this period. In 2021, the ratio rebounded to 3.75, returning to the higher efficiency level seen in 2018. This pattern suggests operational challenges or changes in asset management during 2019 and 2020, followed by recovery in 2021.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
3M Co., net fixed asset turnover (including operating lease, right-of-use asset) 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 sales | ||||||
| Property, plant and equipment, net | ||||||
| Operating lease right of use assets | ||||||
| Property, plant and equipment, net (including operating lease, right-of-use asset) | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Capital Goods | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Industrials | ||||||
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
Net fixed asset turnover (including operating lease, right-of-use asset) = Net sales ÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= ÷ =
2 Click competitor name to see calculations.
- Net Sales Trend
- The net sales demonstrated overall growth across the reported periods. Starting at $31,657 million in 2017, sales exhibited a steady increase to $32,765 million in 2018. Despite a slight decline to $32,136 million in 2019 and a near stagnation at $32,184 million in 2020, the figure increased notably to $35,355 million in 2021. This indicates a recovery and acceleration of revenue generation in the latest year.
- Property, Plant, and Equipment (PP&E), Net
- The net value of property, plant, and equipment, including operating lease right-of-use assets, showed minor fluctuations but a general upward trend. The amount decreased slightly from $8,866 million in 2017 to $8,738 million in 2018, followed by a marked increase to $10,191 million in 2019. Thereafter, the net assets remained relatively stable at around $10,285 million in 2020 and $10,287 million in 2021. This suggests an investment or revaluation peak around 2019 and subsequent maintenance of asset levels.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio, which measures the efficiency in generating sales from net fixed assets, presents some variability. It increased from 3.57 in 2017 to 3.75 in 2018, indicating improved efficiency. However, the ratio declined to 3.15 in 2019 and further declined slightly to 3.13 in 2020, reflecting reduced asset utilization efficiency during these years. In 2021, the ratio improved to 3.44, implying a partial recovery in leveraging fixed assets for sales generation.
- Summary of Observations
- The data reflect a period of fluctuating but overall growing sales alongside increasing fixed asset investment, particularly notable from 2018 to 2019. The efficiency in asset utilization peaked early in the period but decreased when asset values increased significantly, indicating a lag in translating new asset investments into proportional sales growth. The recovery in sales and asset turnover ratio in 2021 suggests an improving operational efficiency and effective use of assets to generate revenue after prior stagnation.
Total Asset Turnover
3M Co., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Total Asset Turnover, Sector | ||||||
| Capital Goods | ||||||
| Total Asset Turnover, Industry | ||||||
| Industrials | ||||||
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
Total asset turnover = Net sales ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals several key trends over the five-year period ending December 31, 2021.
- Net Sales
- Net sales exhibited a general upward trend, increasing from $31,657 million in 2017 to $35,355 million in 2021. There was a slight dip in 2019 followed by stabilization in 2020, but overall, the sales volume grew by approximately 11.7% over the period, indicating expanding market demand or successful sales strategies.
- Total Assets
- Total assets fluctuated during the period. Starting at $37,987 million in 2017, assets decreased slightly in 2018 to $36,500 million before experiencing a significant increase in 2019 to $44,659 million. The upward trend continued in 2020 to $47,344 million, with a minor decline to $47,072 million in 2021. Overall, total assets increased by roughly 23.9%, suggesting considerable investments or acquisitions, especially between 2018 and 2020.
- Total Asset Turnover
- The total asset turnover ratio showed a declining trend from 0.83 in 2017 to a low of 0.68 in 2020, followed by a partial recovery to 0.75 in 2021. This ratio measures the efficiency of asset use to generate sales. The decline indicates that the company’s asset base grew faster than sales in most years, leading to less efficient asset utilization over time. The improvement in 2021 suggests some recovery in operational efficiency but still remains below the 2017 level.
In summary, the company experienced growth in net sales and total assets over the analyzed period. However, the decline in total asset turnover indicates that the expansion of assets did not translate into proportional sales growth, implying reduced asset efficiency. The slight rebound in asset turnover towards the end of the period may signal improvements in how assets are being leveraged to generate revenue.
Equity Turnover
3M Co., equity turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | ||||||
| Total 3M Company shareholders’ equity | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Equity Turnover, Sector | ||||||
| Capital Goods | ||||||
| Equity Turnover, Industry | ||||||
| Industrials | ||||||
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
Equity turnover = Net sales ÷ Total 3M Company shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Net Sales
- The net sales demonstrated a generally positive trend over the five-year period. Starting at $31,657 million in 2017, sales grew to $32,765 million in 2018, showing a notable increase. However, there was a slight decline in 2019, with sales decreasing to $32,136 million. The figure remained relatively stable in 2020, approximately $32,184 million, before experiencing a significant rise in 2021, reaching $35,355 million.
- Total Shareholders’ Equity
- Shareholders' equity exhibited variability followed by overall growth. Equity decreased from $11,563 million in 2017 to $9,796 million in 2018, indicating a contraction. This was followed by a modest recovery to $10,063 million in 2019. Subsequently, there was a noticeable increase in equity in 2020, rising to $12,867 million, and this upward momentum continued into 2021, reaching $15,046 million.
- Equity Turnover
- The equity turnover ratio showed a downward trend over the period. It peaked at 3.34 in 2018, a significant increase from 2.74 in 2017, indicating improved efficiency in using equity to generate sales. However, this ratio declined to 3.19 in 2019, then more sharply to 2.5 in 2020, and continued decreasing to 2.35 in 2021. This trend suggests a diminishing return on equity in terms of sales generation efficiency.
- Summary of Trends
- Over the five-year span, net sales rose moderately with a peak in 2021, reflecting growing revenue strength. Shareholders' equity showed initial decline but robust growth starting in 2020, potentially signifying enhanced retained earnings or capital inflows. The declining equity turnover ratio from 2018 onward suggests that while equity base increased, its efficiency in generating sales has decreased, possibly due to strategic investments or changes in business operations impacting asset utilization.