3M Co. (MMM)

Long-term (Investment) Activity Analysis

Difficulty: Beginner

Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.

3M Co., long-term (investment) activity ratios

	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
Net fixed asset turnover	3.57	3.54	3.56	3.75	3.57
Total asset turnover	0.83	0.92	0.93	1.02	0.92
Equity turnover	2.74	2.92	2.59	2.43	1.76

Source: Based on data from 3M Co. Annual Reports

Ratio	Description	The company
Net fixed asset turnover	An activity ratio calculated as total revenue divided by net fixed assets.	3M Co.'s net fixed asset turnover deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.
Total asset turnover	An activity ratio calculated as total revenue divided by total assets.	3M Co.'s total asset turnover deteriorated from 2015 to 2016 and from 2016 to 2017.
Equity turnover	An activity ratio calculated as total revenue divided by shareholders' equity.	3M Co.'s equity turnover improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017 not reaching 2015 level.

3M Co., net fixed asset turnover calculation, comparison to benchmarks

	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
Selected Financial Data (USD $ in millions)
Net sales	31,657	30,109	30,274	31,821	30,871
Property, plant and equipment, net	8,866	8,516	8,515	8,489	8,652
Ratio
Net fixed asset turnover¹	3.57	3.54	3.56	3.75	3.57
Benchmarks
Net Fixed Asset Turnover, Competitors
Danaher Corp.	7.47	7.17	7.28	9.04	8.65
General Electric Co.	4.74	5.80	5.27	6.24	5.75
Honeywell International Inc.	6.84	6.78	6.66	7.49	7.40
Net Fixed Asset Turnover, Sector
General Industrials	4.95	5.51	5.25	5.99	5.64
Net Fixed Asset Turnover, Industry
Industrials	3.77	3.82	3.95	4.24	4.23

Source: Based on data from 3M Co. Annual Reports

2017 Calculations

¹ Net fixed asset turnover = Net sales ÷ Property, plant and equipment, net
= 31,657 ÷ 8,866 = 3.57

Ratio	Description	The company
Net fixed asset turnover	An activity ratio calculated as total revenue divided by net fixed assets.	3M Co.'s net fixed asset turnover deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.

3M Co., total asset turnover calculation, comparison to benchmarks

	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
Selected Financial Data (USD $ in millions)
Net sales	31,657	30,109	30,274	31,821	30,871
Total assets	37,987	32,906	32,718	31,269	33,550
Ratio
Total asset turnover¹	0.83	0.92	0.93	1.02	0.92
Benchmarks
Total Asset Turnover, Competitors
Danaher Corp.	0.39	0.37	0.43	0.54	0.55
General Electric Co.	0.39	0.40	0.33	0.44	0.44
Honeywell International Inc.	0.68	0.73	0.78	0.89	0.86
Total Asset Turnover, Sector
General Industrials	0.47	0.48	0.43	0.55	0.55
Total Asset Turnover, Industry
Industrials	0.69	0.69	0.68	0.76	0.75

Source: Based on data from 3M Co. Annual Reports

2017 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 31,657 ÷ 37,987 = 0.83

Ratio	Description	The company
Total asset turnover	An activity ratio calculated as total revenue divided by total assets.	3M Co.'s total asset turnover deteriorated from 2015 to 2016 and from 2016 to 2017.

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

	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
Selected Financial Data (USD $ in millions)
Net sales	31,657	30,109	30,274	31,821	30,871
Total 3M Company shareholders' equity	11,563	10,298	11,708	13,109	17,502
Ratio
Equity turnover¹	2.74	2.92	2.59	2.43	1.76
Benchmarks
Equity Turnover, Competitors
Danaher Corp.	0.70	0.73	0.87	0.85	0.85
General Electric Co.	1.77	1.46	1.08	0.84	0.77
Honeywell International Inc.	2.35	2.03	2.11	2.28	2.24
Equity Turnover, Sector
General Industrials	1.71	1.53	1.29	1.09	1.01
Equity Turnover, Industry
Industrials	2.92	2.80	2.47	2.18	1.92

Source: Based on data from 3M Co. Annual Reports

2017 Calculations

¹ Equity turnover = Net sales ÷ Total 3M Company shareholders' equity
= 31,657 ÷ 11,563 = 2.74

Ratio	Description	The company
Equity turnover	An activity ratio calculated as total revenue divided by shareholders' equity.	3M Co.'s equity turnover improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017 not reaching 2015 level.