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, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Turnover Ratios
Inventory turnover 3.82 3.97 4.44 4.37 4.44
Receivables turnover 6.53 6.45 6.86 7.29 7.51
Payables turnover 7.36 8.23 8.36 9.08 9.10
Working capital turnover 5.07 4.80 5.47 7.83 5.52
Average No. of Days
Average inventory processing period 96 92 82 83 82
Add: Average receivable collection period 56 57 53 50 49
Operating cycle 152 149 135 133 131
Less: Average payables payment period 50 44 44 40 40
Cash conversion cycle 102 105 91 93 91

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).

Ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. 3M Co.’s inventory turnover 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 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 declined 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 deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.

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 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 average receivable collection period 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

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ 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 
Ratio
Inventory turnover1 3.82 3.97 4.44 4.37 4.44
Benchmarks
Inventory Turnover, Competitors
Danaher Corp. 4.42 4.42 4.68 5.17
General Electric Co. 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 4.43 4.31 4.14 4.93
Inventory Turnover, Industry
Industrials 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).

2018 Calculations

1 Inventory turnover = Cost of sales ÷ Inventories
= 16,682 ÷ 4,366 = 3.82

Ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. 3M Co.’s inventory turnover deteriorated from 2016 to 2017 and from 2017 to 2018.

Receivables Turnover

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

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ 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 
Ratio
Receivables turnover1 6.53 6.45 6.86 7.29 7.51
Benchmarks
Receivables Turnover, Competitors
Danaher Corp. 5.20 5.30 5.19 5.48
General Electric Co. 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 4.88 4.94 4.52 5.09
Receivables Turnover, Industry
Industrials 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).

2018 Calculations

1 Receivables turnover = Net sales ÷ Accounts receivable, net of allowances
= 32,765 ÷ 5,020 = 6.53

Ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. 3M Co.’s receivables turnover deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.

Payables Turnover

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

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ 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 
Ratio
Payables turnover1 7.36 8.23 8.36 9.08 9.10
Benchmarks
Payables Turnover, Competitors
Danaher Corp. 5.39 5.08 4.78 5.05
General Electric Co. 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 5.70 5.86 5.85 5.36
Payables Turnover, Industry
Industrials 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).

2018 Calculations

1 Payables turnover = Cost of sales ÷ Accounts payable
= 16,682 ÷ 2,266 = 7.36

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 2016 to 2017 and from 2017 to 2018.

Working Capital Turnover

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

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ 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 
Ratio
Working capital turnover1 5.07 4.80 5.47 7.83 5.52
Benchmarks
Working Capital Turnover, Competitors
Danaher Corp. 8.91 12.34 4.94
General Electric Co. 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 2.50 2.26 2.80 0.90
Working Capital Turnover, Industry
Industrials 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).

2018 Calculations

1 Working capital turnover = Net sales ÷ Working capital
= 32,765 ÷ 6,465 = 5.07

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 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

Microsoft Excel LibreOffice Calc
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
Ratio (no. of days)
Average inventory processing period1 96 92 82 83 82
Benchmarks (no. of days)
Average Inventory Processing Period, Competitors
Danaher Corp. 83 83 78 71
General Electric Co. 87 93 99 79
Honeywell International Inc. 54 61 59 60 56
Average Inventory Processing Period, Sector
General Industrials 82 85 88 74
Average Inventory Processing Period, Industry
Industrials 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).

2018 Calculations

1 Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 3.82 = 96

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 deteriorated from 2016 to 2017 and from 2017 to 2018.

Average Receivable Collection Period

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

Microsoft Excel LibreOffice Calc
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
Ratio (no. of days)
Average receivable collection period1 56 57 53 50 49
Benchmarks (no. of days)
Average Receivable Collection Period, Competitors
Danaher Corp. 70 69 70 67
General Electric Co. 79 80 93 79
Honeywell International Inc. 66 80 76 76 72
Average Receivable Collection Period, Sector
General Industrials 75 74 81 72
Average Receivable Collection Period, Industry
Industrials 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).

2018 Calculations

1 Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 6.53 = 56

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 2016 to 2017 but then slightly improved from 2017 to 2018.

Operating Cycle

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

No. of days

Microsoft Excel LibreOffice Calc
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
Ratio
Operating cycle1 152 149 135 133 131
Benchmarks
Operating Cycle, Competitors
Danaher Corp. 153 152 148 138
General Electric Co. 166 173 192 158
Honeywell International Inc. 120 141 135 136 128
Operating Cycle, Sector
General Industrials 157 159 169 146
Operating Cycle, Industry
Industrials 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).

2018 Calculations

1 Operating cycle = Average inventory processing period + Average receivable collection period
= 96 + 56 = 152

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

Microsoft Excel LibreOffice Calc
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
Ratio (no. of days)
Average payables payment period1 50 44 44 40 40
Benchmarks (no. of days)
Average Payables Payment Period, Competitors
Danaher Corp. 68 72 76 72
General Electric Co. 60 60 60 73
Honeywell International Inc. 70 87 76 76 68
Average Payables Payment Period, Sector
General Industrials 64 62 62 68
Average Payables Payment Period, Industry
Industrials 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).

2018 Calculations

1 Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 7.36 = 50

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, 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
Ratio
Cash conversion cycle1 102 105 91 93 91
Benchmarks
Cash Conversion Cycle, Competitors
Danaher Corp. 85 80 72 66
General Electric Co. 106 113 132 85
Honeywell International Inc. 50 54 59 60 60
Cash Conversion Cycle, Sector
General Industrials 93 97 107 78
Cash Conversion Cycle, Industry
Industrials 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).

2018 Calculations

1 Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 96 + 5650 = 102

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.