3M Co. (MMM)
Analysis of Short-term (Operating) Activity Ratios
Beginner level
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Short-term Activity Ratios (Summary)
3M Co., short-term (operating) activity 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).
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | 3M Co.’s inventory turnover ratio deteriorated from 2016 to 2017 and from 2017 to 2018. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | 3M Co.’s receivables turnover ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | 3M Co.’s payables turnover ratio decreased from 2016 to 2017 and from 2017 to 2018. |
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | 3M Co.’s working capital turnover ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018. |
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | 3M Co.’s number of days of inventory outstanding deteriorated from 2016 to 2017 and from 2017 to 2018. |
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | 3M Co.’s number of days of receivables outstanding deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018. |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | 3M Co.’s operating cycle deteriorated from 2016 to 2017 and from 2017 to 2018. |
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | |
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | 3M Co.’s cash conversion cycle deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018. |
Inventory Turnover
3M Co., inventory turnover 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) | ||||||
| Cost of sales | 16,682 | 16,001 | 15,040 | 15,383 | 16,447 | |
| Inventories | 4,366 | 4,034 | 3,385 | 3,518 | 3,706 | |
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | 3.82 | 3.97 | 4.44 | 4.37 | 4.44 | |
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| Danaher Corp. | 4.60 | 4.42 | 4.42 | 4.68 | 5.17 | |
| General Electric Co. | 4.81 | 4.19 | 3.91 | 3.67 | 4.60 | |
| Honeywell International Inc. | 6.71 | 5.98 | 6.22 | 6.05 | 6.57 | |
| Inventory Turnover, Sector | ||||||
| General Industrials | 4.93 | 4.43 | 4.31 | 4.14 | 4.93 | |
| Inventory Turnover, Industry | ||||||
| Industrials | 4.19 | 4.43 | 4.49 | 4.28 | 4.56 | |
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
Inventory turnover = Cost of sales ÷ Inventories
= 16,682 ÷ 4,366 = 3.82
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | 3M Co.’s inventory turnover ratio deteriorated from 2016 to 2017 and from 2017 to 2018. |
Receivables Turnover
3M Co., receivables turnover 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 sales | 32,765 | 31,657 | 30,109 | 30,274 | 31,821 | |
| Accounts receivable, net of allowances | 5,020 | 4,911 | 4,392 | 4,154 | 4,238 | |
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | 6.53 | 6.45 | 6.86 | 7.29 | 7.51 | |
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Danaher Corp. | 5.70 | 5.20 | 5.30 | 5.19 | 5.48 | |
| General Electric Co. | 5.71 | 4.63 | 4.59 | 3.92 | 4.59 | |
| Honeywell International Inc. | 5.57 | 4.57 | 4.81 | 4.78 | 5.06 | |
| Receivables Turnover, Sector | ||||||
| General Industrials | 5.80 | 4.88 | 4.94 | 4.52 | 5.09 | |
| Receivables Turnover, Industry | ||||||
| Industrials | 7.92 | 6.39 | 6.59 | 6.57 | 7.01 | |
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
Receivables turnover = Net sales ÷ Accounts receivable, net of allowances
= 32,765 ÷ 5,020 = 6.53
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | 3M Co.’s receivables turnover ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018. |
Payables Turnover
3M Co., payables turnover 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) | ||||||
| Cost of sales | 16,682 | 16,001 | 15,040 | 15,383 | 16,447 | |
| Accounts payable | 2,266 | 1,945 | 1,798 | 1,694 | 1,807 | |
| Short-term Activity Ratio | ||||||
| Payables turnover1 | 7.36 | 8.23 | 8.36 | 9.08 | 9.10 | |
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Danaher Corp. | 5.13 | 5.39 | 5.08 | 4.78 | 5.05 | |
| General Electric Co. | 5.40 | 6.07 | 6.06 | 6.04 | 4.98 | |
| Honeywell International Inc. | 5.18 | 4.19 | 4.77 | 4.79 | 5.40 | |
| Payables Turnover, Sector | ||||||
| General Industrials | 5.50 | 5.70 | 5.86 | 5.85 | 5.36 | |
| Payables Turnover, Industry | ||||||
| Industrials | 6.66 | 6.77 | 7.32 | 7.68 | 7.41 | |
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
Payables turnover = Cost of sales ÷ Accounts payable
= 16,682 ÷ 2,266 = 7.36
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | 3M Co.’s payables turnover ratio decreased from 2016 to 2017 and from 2017 to 2018. |
Working Capital Turnover
3M Co., working capital turnover 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) | ||||||
| Current assets | 13,709 | 14,277 | 11,726 | 10,986 | 11,765 | |
| Less: Current liabilities | 7,244 | 7,687 | 6,219 | 7,118 | 5,998 | |
| Working capital | 6,465 | 6,590 | 5,507 | 3,868 | 5,767 | |
| Net sales | 32,765 | 31,657 | 30,109 | 30,274 | 31,821 | |
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | 5.07 | 4.80 | 5.47 | 7.83 | 5.52 | |
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Danaher Corp. | 8.83 | 8.91 | — | 12.34 | 4.94 | |
| General Electric Co. | 2.15 | 1.73 | 1.47 | 1.69 | 0.52 | |
| Honeywell International Inc. | 7.69 | 5.68 | 5.84 | 22.94 | 5.43 | |
| Working Capital Turnover, Sector | ||||||
| General Industrials | 3.11 | 2.50 | 2.26 | 2.80 | 0.90 | |
| Working Capital Turnover, Industry | ||||||
| Industrials | 7.46 | 5.08 | 5.16 | 5.68 | 2.66 | |
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
Working capital turnover = Net sales ÷ Working capital
= 32,765 ÷ 6,465 = 5.07
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | 3M Co.’s working capital turnover ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018. |
Average Inventory Processing Period
3M Co., average inventory processing period calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Inventory turnover | 3.82 | 3.97 | 4.44 | 4.37 | 4.44 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | 96 | 92 | 82 | 83 | 82 | |
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| Danaher Corp. | 79 | 83 | 83 | 78 | 71 | |
| General Electric Co. | 76 | 87 | 93 | 99 | 79 | |
| Honeywell International Inc. | 54 | 61 | 59 | 60 | 56 | |
| Average Inventory Processing Period, Sector | ||||||
| General Industrials | 74 | 82 | 85 | 88 | 74 | |
| Average Inventory Processing Period, Industry | ||||||
| Industrials | 87 | 82 | 81 | 85 | 80 | |
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
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 3.82 = 96
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | 3M Co.’s number of days of inventory outstanding deteriorated from 2016 to 2017 and from 2017 to 2018. |
Average Receivable Collection Period
3M Co., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | 6.53 | 6.45 | 6.86 | 7.29 | 7.51 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | 56 | 57 | 53 | 50 | 49 | |
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Danaher Corp. | 64 | 70 | 69 | 70 | 67 | |
| General Electric Co. | 64 | 79 | 80 | 93 | 79 | |
| Honeywell International Inc. | 66 | 80 | 76 | 76 | 72 | |
| Average Receivable Collection Period, Sector | ||||||
| General Industrials | 63 | 75 | 74 | 81 | 72 | |
| Average Receivable Collection Period, Industry | ||||||
| Industrials | 46 | 57 | 55 | 56 | 52 | |
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
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 6.53 = 56
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | 3M Co.’s number of days of receivables outstanding deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018. |
Operating Cycle
3M Co., operating cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 96 | 92 | 82 | 83 | 82 | |
| Average receivable collection period | 56 | 57 | 53 | 50 | 49 | |
| Short-term Activity Ratio | ||||||
| Operating cycle1 | 152 | 149 | 135 | 133 | 131 | |
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| Danaher Corp. | 143 | 153 | 152 | 148 | 138 | |
| General Electric Co. | 140 | 166 | 173 | 192 | 158 | |
| Honeywell International Inc. | 120 | 141 | 135 | 136 | 128 | |
| Operating Cycle, Sector | ||||||
| General Industrials | 137 | 157 | 159 | 169 | 146 | |
| Operating Cycle, Industry | ||||||
| Industrials | 133 | 139 | 136 | 141 | 132 | |
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
Operating cycle = Average inventory processing period + Average receivable collection period
= 96 + 56 = 152
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | 3M Co.’s operating cycle deteriorated from 2016 to 2017 and from 2017 to 2018. |
Average Payables Payment Period
3M Co., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | 7.36 | 8.23 | 8.36 | 9.08 | 9.10 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | 50 | 44 | 44 | 40 | 40 | |
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Danaher Corp. | 71 | 68 | 72 | 76 | 72 | |
| General Electric Co. | 68 | 60 | 60 | 60 | 73 | |
| Honeywell International Inc. | 70 | 87 | 76 | 76 | 68 | |
| Average Payables Payment Period, Sector | ||||||
| General Industrials | 66 | 64 | 62 | 62 | 68 | |
| Average Payables Payment Period, Industry | ||||||
| Industrials | 55 | 54 | 50 | 48 | 49 | |
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
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 7.36 = 50
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. |
Cash Conversion Cycle
3M Co., cash conversion cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 96 | 92 | 82 | 83 | 82 | |
| Average receivable collection period | 56 | 57 | 53 | 50 | 49 | |
| Average payables payment period | 50 | 44 | 44 | 40 | 40 | |
| Short-term Activity Ratio | ||||||
| Cash conversion cycle1 | 102 | 105 | 91 | 93 | 91 | |
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| Danaher Corp. | 72 | 85 | 80 | 72 | 66 | |
| General Electric Co. | 72 | 106 | 113 | 132 | 85 | |
| Honeywell International Inc. | 50 | 54 | 59 | 60 | 60 | |
| Cash Conversion Cycle, Sector | ||||||
| General Industrials | 71 | 93 | 97 | 107 | 78 | |
| Cash Conversion Cycle, Industry | ||||||
| Industrials | 78 | 85 | 86 | 93 | 83 | |
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
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 96 + 56 – 50 = 102
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | 3M Co.’s cash conversion cycle deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018. |