Microsoft Excel LibreOffice Calc

Short-term (Operating) Activity Analysis

Difficulty: Beginner


Ratios (Summary)

3M Co., short-term (operating) activity ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Turnover Ratios
Inventory turnover 3.97 4.44 4.37 4.44 4.17
Receivables turnover 6.45 6.86 7.29 7.51 7.26
Payables turnover 8.23 8.36 9.08 9.10 8.95
Working capital turnover 4.80 5.47 7.83 5.52 5.90
Average No. of Days
Average inventory processing period 92 82 83 82 88
Add: Average receivable collection period 57 53 50 49 50
Operating cycle 149 135 133 131 138
Less: Average payables payment period 44 44 40 40 41
Cash conversion cycle 105 91 93 91 97

Based on: 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), 10-K (filing date: 2014-02-13).

Ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. 3M Co.'s inventory turnover improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.
Receivables turnover An activity ratio equal to revenue divided by receivables. 3M Co.'s receivables turnover deteriorated from 2015 to 2016 and from 2016 to 2017.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. 3M Co.'s payables turnover declined from 2015 to 2016 and from 2016 to 2017.
Working capital turnover An activity ratio calculated as revenue divided by working capital. 3M Co.'s working capital turnover deteriorated from 2015 to 2016 and from 2016 to 2017.
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 average inventory processing period improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. 3M Co.'s average receivable collection period deteriorated from 2015 to 2016 and from 2016 to 2017.
Operating cycle Equal to average inventory processing period plus average receivables collection period. 3M Co.'s operating cycle deteriorated from 2015 to 2016 and from 2016 to 2017.
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 improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

Inventory Turnover

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

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Cost of sales 16,001  15,040  15,383  16,447  16,106 
Inventories 4,034  3,385  3,518  3,706  3,864 
Ratio
Inventory turnover1 3.97 4.44 4.37 4.44 4.17
Benchmarks
Inventory Turnover, Competitors
Danaher Corp. 4.42 4.42 4.68 5.17 5.14
General Electric Co. 4.19 3.91 3.67 4.60 4.45
Honeywell International Inc. 5.98 6.22 6.05 6.57 6.61
Inventory Turnover, Sector
General Industrials 4.43 4.31 4.14 4.93 4.80
Inventory Turnover, Industry
Industrials 4.41 4.47 4.27 4.54 4.60

Based on: 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), 10-K (filing date: 2014-02-13).

2017 Calculations

1 Inventory turnover = Cost of sales ÷ Inventories
= 16,001 ÷ 4,034 = 3.97

Ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. 3M Co.'s inventory turnover improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

Receivables Turnover

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

Microsoft Excel LibreOffice Calc
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 
Accounts receivable, net of allowances 4,911  4,392  4,154  4,238  4,253 
Ratio
Receivables turnover1 6.45 6.86 7.29 7.51 7.26
Benchmarks
Receivables Turnover, Competitors
Danaher Corp. 5.20 5.30 5.19 5.48 5.54
General Electric Co. 4.63 4.59 3.92 4.59 4.70
Honeywell International Inc. 4.57 4.81 4.78 5.06 4.93
Receivables Turnover, Sector
General Industrials 4.88 4.94 4.52 5.09 5.12
Receivables Turnover, Industry
Industrials 6.37 6.58 6.55 7.00 7.03

Based on: 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), 10-K (filing date: 2014-02-13).

2017 Calculations

1 Receivables turnover = Net sales ÷ Accounts receivable, net of allowances
= 31,657 ÷ 4,911 = 6.45

Ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. 3M Co.'s receivables turnover deteriorated from 2015 to 2016 and from 2016 to 2017.

Payables Turnover

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

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Cost of sales 16,001  15,040  15,383  16,447  16,106 
Accounts payable 1,945  1,798  1,694  1,807  1,799 
Ratio
Payables turnover1 8.23 8.36 9.08 9.10 8.95
Benchmarks
Payables Turnover, Competitors
Danaher Corp. 5.39 5.08 4.78 5.05 5.15
General Electric Co. 6.07 6.06 6.04 4.98 4.68
Honeywell International Inc. 4.19 4.77 4.79 5.40 5.48
Payables Turnover, Sector
General Industrials 5.70 5.86 5.85 5.36 5.18
Payables Turnover, Industry
Industrials 6.74 7.29 7.65 7.38 7.45

Based on: 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), 10-K (filing date: 2014-02-13).

2017 Calculations

1 Payables turnover = Cost of sales ÷ Accounts payable
= 16,001 ÷ 1,945 = 8.23

Ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. 3M Co.'s payables turnover declined from 2015 to 2016 and from 2016 to 2017.

Working Capital Turnover

3M Co., working capital turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Current assets 14,277  11,726  10,986  11,765  12,733 
Less: Current liabilities 7,687  6,219  7,118  5,998  7,498 
Working capital 6,590  5,507  3,868  5,767  5,235 
Net sales 31,657  30,109  30,274  31,821  30,871 
Ratio
Working capital turnover1 4.80 5.47 7.83 5.52 5.90
Benchmarks
Working Capital Turnover, Competitors
Danaher Corp. 8.91 12.34 4.94 4.17
General Electric Co. 1.73 1.47 1.69 0.52 0.47
Honeywell International Inc. 5.68 5.84 22.94 5.43 5.59
Working Capital Turnover, Sector
General Industrials 2.50 2.26 2.80 0.90 0.82
Working Capital Turnover, Industry
Industrials 5.07 5.15 5.66 2.65 2.40

Based on: 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), 10-K (filing date: 2014-02-13).

2017 Calculations

1 Working capital turnover = Net sales ÷ Working capital
= 31,657 ÷ 6,590 = 4.80

Ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. 3M Co.'s working capital turnover deteriorated from 2015 to 2016 and from 2016 to 2017.

Average Inventory Processing Period

3M Co., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data
Inventory turnover 3.97 4.44 4.37 4.44 4.17
Ratio (no. of days)
Average inventory processing period1 92 82 83 82 88
Benchmarks (no. of days)
Average Inventory Processing Period, Competitors
Danaher Corp. 83 83 78 71 71
General Electric Co. 87 93 99 79 82
Honeywell International Inc. 61 59 60 56 55
Average Inventory Processing Period, Sector
General Industrials 82 85 88 74 76
Average Inventory Processing Period, Industry
Industrials 83 82 86 80 79

Based on: 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), 10-K (filing date: 2014-02-13).

2017 Calculations

1 Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 3.97 = 92

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 average inventory processing period improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

Average Receivable Collection Period

3M Co., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data
Receivables turnover 6.45 6.86 7.29 7.51 7.26
Ratio (no. of days)
Average receivable collection period1 57 53 50 49 50
Benchmarks (no. of days)
Average Receivable Collection Period, Competitors
Danaher Corp. 70 69 70 67 66
General Electric Co. 79 80 93 79 78
Honeywell International Inc. 80 76 76 72 74
Average Receivable Collection Period, Sector
General Industrials 75 74 81 72 71
Average Receivable Collection Period, Industry
Industrials 57 56 56 52 52

Based on: 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), 10-K (filing date: 2014-02-13).

2017 Calculations

1 Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 6.45 = 57

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 average receivable collection period deteriorated from 2015 to 2016 and from 2016 to 2017.

Operating Cycle

3M Co., operating cycle calculation, comparison to benchmarks

No. of days

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data
Average inventory processing period 92 82 83 82 88
Average receivable collection period 57 53 50 49 50
Ratio
Operating cycle1 149 135 133 131 138
Benchmarks
Operating Cycle, Competitors
Danaher Corp. 153 152 148 138 137
General Electric Co. 166 173 192 158 160
Honeywell International Inc. 141 135 136 128 129
Operating Cycle, Sector
General Industrials 157 159 169 146 147
Operating Cycle, Industry
Industrials 140 138 142 132 131

Based on: 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), 10-K (filing date: 2014-02-13).

2017 Calculations

1 Operating cycle = Average inventory processing period + Average receivable collection period
= 92 + 57 = 149

Ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. 3M Co.'s operating cycle deteriorated from 2015 to 2016 and from 2016 to 2017.

Average Payables Payment Period

3M Co., average payables payment period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data
Payables turnover 8.23 8.36 9.08 9.10 8.95
Ratio (no. of days)
Average payables payment period1 44 44 40 40 41
Benchmarks (no. of days)
Average Payables Payment Period, Competitors
Danaher Corp. 68 72 76 72 71
General Electric Co. 60 60 60 73 78
Honeywell International Inc. 87 76 76 68 67
Average Payables Payment Period, Sector
General Industrials 64 62 62 68 70
Average Payables Payment Period, Industry
Industrials 54 50 48 49 49

Based on: 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), 10-K (filing date: 2014-02-13).

2017 Calculations

1 Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 8.23 = 44

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. of days

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data
Average inventory processing period 92 82 83 82 88
Average receivable collection period 57 53 50 49 50
Average payables payment period 44 44 40 40 41
Ratio
Cash conversion cycle1 105 91 93 91 97
Benchmarks
Cash Conversion Cycle, Competitors
Danaher Corp. 85 80 72 66 66
General Electric Co. 106 113 132 85 82
Honeywell International Inc. 54 59 60 60 62
Cash Conversion Cycle, Sector
General Industrials 93 97 107 78 77
Cash Conversion Cycle, Industry
Industrials 86 88 94 83 82

Based on: 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), 10-K (filing date: 2014-02-13).

2017 Calculations

1 Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 92 + 5744 = 105

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 improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.