Analysis of Long-term (Investment) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Long-term Activity Ratios (Summary)
3M Co., long-term (investment) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
The analysis of key turnover ratios over the reported quarters reveals several notable trends and fluctuations indicative of the company's operational efficiency and asset utilization.
- Net Fixed Asset Turnover
- Starting from the first available data point in the first quarter of 2018, the net fixed asset turnover remained relatively stable with slight fluctuations around the 3.5 to 3.8 range. It peaked near the end of 2018 at 3.8 and generally exhibited a mild downward trend through 2019 and early 2020, reaching approximately 3.42. After this decline, a moderate recovery is observed during 2021, rising back to about 3.79 in the third quarter before settling around 3.76 to 3.78 by the third quarter of 2022. Overall, this suggests fairly consistent efficiency in generating revenue relative to fixed assets, with some cyclicality.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- This ratio follows a trend broadly similar to the standard net fixed asset turnover but at consistently lower values starting mid-2018. Initial values closely track the standard metric but begin to diverge by mid-2019, indicating the impact of operating leases and right-of-use assets on asset base and turnover calculation. The lowest point appears around late 2019 and early 2020 near 3.13, followed by a moderate upward trend through 2021 and into 2022, reaching approximately 3.48. This suggests the inclusion of leased assets affects the asset base growth, tempering turnover ratios but showing gradual improvement over the period.
- Total Asset Turnover
- Total asset turnover showed an initial increase from 0.83 in early 2018 to a peak of 0.9 by the first quarter of 2019. However, a steady decline ensued throughout 2019 and 2020, bottoming around 0.68 in early 2021. Thereafter, the ratio experienced a gradual recovery, climbing to about 0.77 by mid-2022. The initial rise followed by the decline and recovery suggests changes in either total asset base or revenue generation efficiency, possibly influenced by economic conditions affecting asset utilization.
- Equity Turnover
- Equity turnover displayed a strong upward trend from early 2018, moving from 2.74 to peak at 3.34 by the first quarter of 2019. After peaking, the ratio declined consistently through 2020 and into early 2021, reaching levels as low as 2.4. From mid-2021 onward, the ratio remained relatively stable around the 2.4 to 2.5 range, with minor upticks toward 2.55 before a slight decrease. This trend reflects shifts in how effectively the company is utilizing shareholder equity to generate sales, with a notable peak and subsequent normalization at a lower level.
In summary, the company’s efficiency metrics for asset and equity utilization exhibit cyclical patterns with peaks around early 2019 followed by declines during 2020, potentially influenced by external factors such as market conditions. Recovery trends in 2021 and 2022 indicate improving operational efficiency and asset management. The impact of including leased assets in turnover calculations is evident and results in lower but gradually improving ratios over time.
Net Fixed Asset Turnover
3M Co., net fixed asset turnover calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Net sales | 8,619) | 8,702) | 8,829) | 8,612) | 8,942) | 8,950) | 8,851) | 8,583) | 8,350) | 7,176) | 8,075) | 8,111) | 7,991) | 8,171) | 7,863) | 7,945) | 8,152) | 8,390) | 8,278) | 7,990) | 8,172) | 7,810) | 7,685) | |||||||
| Property, plant and equipment, net | 9,196) | 9,319) | 9,389) | 9,429) | 9,323) | 9,358) | 9,240) | 9,421) | 9,216) | 9,089) | 9,165) | 9,333) | 8,891) | 8,998) | 8,829) | 8,738) | 8,630) | 8,645) | 8,864) | 8,866) | 8,658) | 8,566) | 8,551) | |||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||||||||
| Net fixed asset turnover1 | 3.78 | 3.76 | 3.76 | 3.75 | 3.79 | 3.71 | 3.57 | 3.42 | 3.44 | 3.45 | 3.53 | 3.44 | 3.60 | 3.57 | 3.66 | 3.75 | 3.80 | 3.80 | 3.64 | 3.57 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Boeing Co. | 5.85 | 5.72 | 5.68 | 5.70 | 5.65 | 5.44 | 4.85 | 4.92 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 4.62 | 4.36 | 4.18 | 3.99 | 3.84 | 3.59 | 3.32 | 3.15 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 6.80 | 6.50 | 6.38 | 6.41 | 6.45 | 6.25 | 6.08 | 6.02 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 5.04 | 4.83 | 4.73 | 4.55 | 4.53 | 4.45 | 4.33 | 1.63 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 6.54 | 6.45 | 6.27 | 6.18 | 6.28 | 6.15 | 5.88 | 5.86 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 8.48 | 8.48 | 8.70 | 8.83 | 9.05 | 9.17 | 9.15 | 9.07 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 4.50 | 4.43 | 4.37 | 4.30 | 4.39 | 4.25 | 4.10 | 3.78 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Net fixed asset turnover
= (Net salesQ3 2022
+ Net salesQ2 2022
+ Net salesQ1 2022
+ Net salesQ4 2021)
÷ Property, plant and equipment, net
= (8,619 + 8,702 + 8,829 + 8,612)
÷ 9,196 = 3.78
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several noteworthy trends across key metrics over the examined periods.
- Net Sales
- Net sales exhibit a general upward movement from the beginning of the period in March 2017 through to the end of 2018, with values increasing from approximately 7,685 million USD to a peak near 8,390 million USD in June 2018. Following this peak, sales fluctuate moderately but remain relatively stable around 8,000 million USD through 2019. A significant decline is observed in June 2020, where net sales drop to 7,176 million USD, likely impacted by external factors affecting economic conditions. This is followed by a notable recovery and growth trend commencing in the last quarter of 2020, with net sales climbing steadily to reach approximately 8,851 million USD by September 2021 before experiencing some volatility and a mild decline towards the end of the observed timeframe, stabilizing just below 8,700 million USD by the third quarter of 2022.
- Property, Plant, and Equipment, Net
- The net value of property, plant, and equipment generally demonstrates a gradual upward trend throughout the periods, starting from 8,551 million USD in March 2017 and reaching levels above 9,400 million USD by June 2021. Despite some minor fluctuations, the overall trajectory suggests incremental investments or capital retention in fixed assets. A slight reduction is detected towards the last two reported quarters in 2022, signaling possible asset disposals, depreciation acceleration, or revaluations.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio indicates how efficiently the company utilizes its fixed assets to generate net sales. This ratio shows an initial increase from approximately 3.57 in the fourth quarter of 2017 to a high of around 3.80 during 2018. Subsequently, there is a minor decline and relative stability in the ratio throughout 2019 and early 2020, hovering around 3.4 to 3.5. Following some fluctuations, the ratio improves again, rising to approximately 3.79 by the third quarter of 2021, reflecting enhanced asset use efficiency during this period. The ratio remains fairly stable at around 3.75 to 3.78 through mid-2022, suggesting consistent asset productivity in recent quarters.
In summary, net sales experienced a steady increase with a notable dip in mid-2020, followed by recovery; property, plant, and equipment showed incremental growth with slight decreases recently; and the net fixed asset turnover ratio remained relatively stable with slight improvements, indicating consistent asset utilization efficiency over the observed periods.
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 (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Net sales | 8,619) | 8,702) | 8,829) | 8,612) | 8,942) | 8,950) | 8,851) | 8,583) | 8,350) | 7,176) | 8,075) | 8,111) | 7,991) | 8,171) | 7,863) | 7,945) | 8,152) | 8,390) | 8,278) | 7,990) | 8,172) | 7,810) | 7,685) | |||||||
| Property, plant and equipment, net | 9,196) | 9,319) | 9,389) | 9,429) | 9,323) | 9,358) | 9,240) | 9,421) | 9,216) | 9,089) | 9,165) | 9,333) | 8,891) | 8,998) | 8,829) | 8,738) | 8,630) | 8,645) | 8,864) | 8,866) | 8,658) | 8,566) | 8,551) | |||||||
| Operating lease right of use assets | 801) | 835) | 865) | 858) | 840) | 872) | 871) | 864) | 844) | 840) | 849) | 858) | 834) | 879) | 797) | —) | —) | —) | —) | —) | —) | —) | —) | |||||||
| Property, plant and equipment, net (including operating lease, right-of-use asset) | 9,997) | 10,154) | 10,254) | 10,287) | 10,163) | 10,230) | 10,111) | 10,285) | 10,060) | 9,929) | 10,014) | 10,191) | 9,725) | 9,877) | 9,626) | 8,738) | 8,630) | 8,645) | 8,864) | 8,866) | 8,658) | 8,566) | 8,551) | |||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 3.48 | 3.46 | 3.45 | 3.44 | 3.48 | 3.40 | 3.26 | 3.13 | 3.15 | 3.16 | 3.23 | 3.15 | 3.29 | 3.25 | 3.36 | 3.75 | 3.80 | 3.80 | 3.64 | 3.57 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||||||||||||||||||||||||||
| Eaton Corp. plc | 5.73 | 5.59 | 5.58 | 5.60 | 5.62 | 5.42 | 5.30 | 5.26 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 4.01 | 3.93 | 3.87 | 3.80 | 3.89 | 3.76 | 3.63 | 3.36 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset)
= (Net salesQ3 2022
+ Net salesQ2 2022
+ Net salesQ1 2022
+ Net salesQ4 2021)
÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= (8,619 + 8,702 + 8,829 + 8,612)
÷ 9,997 = 3.48
2 Click competitor name to see calculations.
- Net Sales
- Net sales exhibited a generally fluctuating pattern over the observed periods. From March 2017 to December 2017, sales increased from 7,685 million USD to a peak of 8,172 million USD, then experienced minor fluctuations before decreasing slightly in late 2018. A peak was again seen in the first quarter of 2019 at 7,863 million USD, followed by modest variations throughout 2019. The year 2020 showed a notable dip in the second quarter, dropping to 7,176 million USD, likely reflecting external disruptions. Recovery and growth resumed through 2021, reaching a high of 8,950 million USD in December 2021, before a slight decline in 2022 with values settling around 8,600 to 8,800 million USD.
- Property, Plant, and Equipment, Net
- The net value of property, plant, and equipment remained relatively stable with moderate increases over time. Starting at 8,551 million USD in March 2017, it climbed gradually with some fluctuations, peaking around 10,285 million USD in 2021. The values indicated steady investment and asset retention, with slight decreases towards the end of the dataset in 2022, suggesting possible asset disposals, depreciation, or reduced capital expenditures.
- Net Fixed Asset Turnover Ratio
- This ratio, representing the efficiency of fixed asset usage in generating sales, started at 3.57 in December 2017 and showed an upward trend to reach 3.8 in the first half of 2018, indicating improved asset utilization. However, from late 2018 through 2020, the ratio declined, reaching its lowest point around 3.13 by the end of 2020, reflecting possibly reduced sales relative to asset base or increased asset holdings without proportionate sales growth. From early 2021 onward, the ratio improved steadily, rising to approximately 3.48 by the third quarter of 2022, signaling enhanced efficiency in using fixed assets to generate revenue again.
- Summary of Trends and Insights
- The financial data reveals that sales growth has been subject to periodic fluctuations, with significant impact likely arising during mid-2020. Despite this, the company maintained a steady asset base with continuous investments in property and equipment. The net fixed asset turnover demonstrates cycles of efficiency changes, declining during times of lower sales or higher asset base and recovering in periods of stronger sales performance. Overall, the company exhibits resilience and an ability to restore operational efficiency following downturns, with asset management supporting sales generation effectively over the long term.
Total Asset Turnover
3M Co., total asset turnover calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Net sales | 8,619) | 8,702) | 8,829) | 8,612) | 8,942) | 8,950) | 8,851) | 8,583) | 8,350) | 7,176) | 8,075) | 8,111) | 7,991) | 8,171) | 7,863) | 7,945) | 8,152) | 8,390) | 8,278) | 7,990) | 8,172) | 7,810) | 7,685) | |||||||
| Total assets | 46,176) | 45,634) | 45,855) | 47,072) | 48,278) | 48,307) | 47,180) | 47,344) | 45,390) | 45,079) | 46,212) | 44,659) | 42,550) | 38,969) | 39,140) | 36,500) | 37,275) | 36,778) | 38,575) | 37,987) | 35,237) | 33,957) | 33,292) | |||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||||||||
| Total asset turnover1 | 0.75 | 0.77 | 0.77 | 0.75 | 0.73 | 0.72 | 0.70 | 0.68 | 0.70 | 0.70 | 0.70 | 0.72 | 0.75 | 0.82 | 0.83 | 0.90 | 0.88 | 0.89 | 0.84 | 0.83 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Total Asset Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Boeing Co. | 0.45 | 0.45 | 0.45 | 0.45 | 0.43 | 0.41 | 0.38 | 0.38 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 0.66 | 0.63 | 0.61 | 0.58 | 0.57 | 0.53 | 0.50 | 0.50 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 0.59 | 0.56 | 0.56 | 0.58 | 0.57 | 0.52 | 0.52 | 0.56 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 0.40 | 0.39 | 0.37 | 0.36 | 0.30 | 0.30 | 0.29 | 0.29 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 0.58 | 0.55 | 0.54 | 0.53 | 0.54 | 0.53 | 0.51 | 0.51 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 1.24 | 1.24 | 1.28 | 1.32 | 1.28 | 1.28 | 1.28 | 1.29 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 0.42 | 0.41 | 0.41 | 0.40 | 0.40 | 0.39 | 0.38 | 0.35 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Total asset turnover
= (Net salesQ3 2022
+ Net salesQ2 2022
+ Net salesQ1 2022
+ Net salesQ4 2021)
÷ Total assets
= (8,619 + 8,702 + 8,829 + 8,612)
÷ 46,176 = 0.75
2 Click competitor name to see calculations.
The analysis covers the quarterly trends of net sales, total assets, and total asset turnover over the period from March 2017 through September 2022.
- Net Sales
- Net sales exhibited notable fluctuations throughout the observed period. Starting at 7,685 million US dollars in the first quarter of 2017, sales generally increased, reaching a peak near 8,950 million US dollars by the fourth quarter of 2021. There is a visible cyclical pattern where net sales rise and fall across quarters, with occasional declines such as in mid-2020, likely reflecting external economic factors. The overall trajectory suggests moderate growth over the five years, despite some dips.
- Total Assets
- Total assets followed an increasing trend from 33,292 million US dollars in the first quarter of 2017 to a peak of 48,307 million US dollars at the third quarter of 2021. Post this peak, the total assets demonstrate a slight declining movement towards 46,176 million US dollars by the third quarter of 2022. This pattern indicates asset expansion potentially related to investment or acquisition activity, followed by stabilization or partial divestiture in the most recent periods.
- Total Asset Turnover
- Total asset turnover ratios, available from the third quarter of 2017 onward, show a downward trend initially, moving from 0.83 to as low as 0.68 by the first quarter of 2021. Subsequently, turnover ratios begin to improve slightly, rising back to approximately 0.75 by the third quarter of 2022. This metric suggests that the efficiency in using assets to generate sales declined somewhat through the earlier years, but there is evidence of gradual recovery more recently.
In summary, net sales and total assets both showed growth during the period, with total assets growing at a faster relative pace, which corresponded to a declining asset turnover ratio initially. The recent quarters reflect a gain in operational efficiency, as seen in the turnaround of the total asset turnover ratio. These observations highlight ongoing operational and investment activities with varying implications on the company's asset utilization performance.
Equity Turnover
3M Co., equity turnover calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Net sales | 8,619) | 8,702) | 8,829) | 8,612) | 8,942) | 8,950) | 8,851) | 8,583) | 8,350) | 7,176) | 8,075) | 8,111) | 7,991) | 8,171) | 7,863) | 7,945) | 8,152) | 8,390) | 8,278) | 7,990) | 8,172) | 7,810) | 7,685) | |||||||
| Total 3M Company shareholders’ equity | 14,080) | 13,742) | 14,930) | 15,046) | 14,460) | 14,448) | 13,760) | 12,867) | 11,880) | 10,857) | 10,147) | 10,063) | 10,702) | 10,083) | 9,703) | 9,796) | 10,248) | 10,365) | 10,977) | 11,563) | 12,146) | 11,591) | 10,989) | |||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||||||||
| Equity turnover1 | 2.47 | 2.55 | 2.37 | 2.35 | 2.44 | 2.40 | 2.40 | 2.50 | 2.67 | 2.89 | 3.19 | 3.19 | 2.99 | 3.19 | 3.33 | 3.34 | 3.20 | 3.17 | 2.94 | 2.74 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Equity Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Boeing Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 3.45 | 3.26 | 2.92 | 2.92 | 2.74 | 2.57 | 2.43 | 2.55 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 1.26 | 1.21 | 1.19 | 1.20 | 1.22 | 1.24 | 1.18 | 1.20 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 2.29 | 2.06 | 1.82 | 1.76 | 1.92 | 2.15 | 2.10 | 2.05 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 1.97 | 1.96 | 1.87 | 1.85 | 1.94 | 1.89 | 1.81 | 1.86 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 5.41 | 5.61 | 6.57 | 6.12 | 6.89 | 10.24 | 10.46 | 10.87 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 0.94 | 0.93 | 0.89 | 0.88 | 0.89 | 0.88 | 0.84 | 0.78 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Equity turnover
= (Net salesQ3 2022
+ Net salesQ2 2022
+ Net salesQ1 2022
+ Net salesQ4 2021)
÷ Total 3M Company shareholders’ equity
= (8,619 + 8,702 + 8,829 + 8,612)
÷ 14,080 = 2.47
2 Click competitor name to see calculations.
The quarterly financial data reveals several trends across net sales, shareholders' equity, and equity turnover ratios over the observed periods. The analysis focuses on the changes and patterns that emerge across these key indicators.
- Net Sales
- Net sales exhibit a generally fluctuating pattern with periods of growth and decline. From March 2017 through March 2019, net sales remained relatively stable, oscillating around the 7,600 to 8,200 million USD range. However, starting in the first quarter of 2020, a noticeable decrease occurs, reaching a low in June 2020 at 7,176 million USD, likely reflecting external economic pressures during that time.
- Following this dip, net sales recovered significantly in the subsequent quarters, peaking at 8,951 million USD by the end of 2021. The period of recovery demonstrates resilience in revenue generation. In early to mid-2022, net sales showed a slight downward adjustment but generally maintained levels above 8,600 million USD, indicating some stabilization after recovery.
- Total 3M Company Shareholders’ Equity
- Shareholders’ equity showed an initial upward trend from March 2017 to September 2017, growing from approximately 10,989 million USD to 12,146 million USD. However, following this peak, a downward movement is observed through to December 2018, with equity declining to 9,796 million USD, suggesting possible reductions in retained earnings or other equity components during this period.
- From early 2019 onward, shareholders’ equity manifested a steady recovery and growth trajectory, increasing consistently to reach a high of 15,046 million USD in March 2022. This trend signifies enhanced capitalization and possibly improved profitability or capital management practices. Notably, a minor dip in equity occurs mid-2022 but remains at elevated levels compared to earlier years.
- Equity Turnover Ratio
- The equity turnover ratio, available from the second quarter of 2017, started at a level of 2.74 and showed a rising trend through to the first quarter of 2019, reaching 3.34. This increase suggests more efficient use of equity to generate sales during this period.
- After peaking, the ratio experienced a general decline through 2020 and 2021, bottoming around 2.4 to 2.5 by the end of 2021. This decrease may indicate either slower sales growth relative to equity or increasing equity base not yet fully leveraged to generate proportional sales revenue.
- In 2022, the ratio displays a slight upward correction, rising to approximately 2.55 in September, which could suggest a marginal improvement in asset utilization or sales efficiency relative to shareholders' equity.
Overall, the data indicates a period of moderate sales volatility influenced by external conditions, accompanied by significant shareholder equity growth over time. The equity turnover reflects changes in operational efficiency, showing an initial phase of improvement followed by relative stabilization at lower levels towards the end of the period. These observations may highlight strategic shifts in capital structure or operational adjustments impacting sales generation efficiency.