Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

3M Co. (NYSE:MMM)

Analysis of Short-term (Operating) Activity Ratios

Beginner level


Short-term Activity Ratios (Summary)

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

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Turnover Ratios
Inventory turnover 4.15 3.82 3.97 4.44 4.37
Receivables turnover 6.71 6.53 6.45 6.86 7.29
Payables turnover 7.69 7.36 8.23 8.36 9.08
Working capital turnover 8.57 5.07 4.80 5.47 7.83
Average No. Days
Average inventory processing period 88 96 92 82 83
Add: Average receivable collection period 54 56 57 53 50
Operating cycle 142 152 149 135 133
Less: Average payables payment period 47 50 44 44 40
Cash conversion cycle 95 102 105 91 93

Based on: 10-K (filing date: 2020-02-06), 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).

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 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.
Receivables turnover An activity ratio equal to revenue divided by receivables. 3M Co.’s receivables turnover ratio improved from 2017 to 2018 and from 2018 to 2019.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. 3M Co.’s payables turnover ratio decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.
Working capital turnover An activity ratio calculated as revenue divided by working capital. 3M Co.’s working capital turnover ratio improved from 2017 to 2018 and from 2018 to 2019.

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 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.
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 improved from 2017 to 2018 and from 2018 to 2019.
Operating cycle Equal to average inventory processing period plus average receivables collection period. 3M Co.’s operating cycle deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.
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 2017 to 2018 and from 2018 to 2019.

Inventory Turnover

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

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Cost of sales 17,136  16,682  16,001  15,040  15,383 
Inventories 4,134  4,366  4,034  3,385  3,518 
Short-term Activity Ratio
Inventory turnover1 4.15 3.82 3.97 4.44 4.37
Benchmarks
Inventory Turnover, Competitors2
General Electric Co. 4.97 4.81 4.19 3.91 3.67
Honeywell International Inc. 5.51 6.71 5.98 6.22 6.05
Inventory Turnover, Sector
General Industrials 4.92 4.95 4.43 4.31 4.10
Inventory Turnover, Industry
Industrials 3.43 3.88 4.09 4.18 3.97

Based on: 10-K (filing date: 2020-02-06), 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).

1 2019 Calculation
Inventory turnover = Cost of sales ÷ Inventories
= 17,136 ÷ 4,134 = 4.15

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 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

Receivables Turnover

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

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Net sales 32,136  32,765  31,657  30,109  30,274 
Accounts receivable, net of allowances 4,791  5,020  4,911  4,392  4,154 
Short-term Activity Ratio
Receivables turnover1 6.71 6.53 6.45 6.86 7.29
Benchmarks
Receivables Turnover, Competitors2
General Electric Co. 5.22 5.71 4.63 4.59 3.92
Honeywell International Inc. 4.90 5.57 4.57 4.81 4.78
Receivables Turnover, Sector
General Industrials 5.38 5.81 4.85 4.91 4.45
Receivables Turnover, Industry
Industrials 7.83 7.99 6.21 6.52 6.47

Based on: 10-K (filing date: 2020-02-06), 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).

1 2019 Calculation
Receivables turnover = Net sales ÷ Accounts receivable, net of allowances
= 32,136 ÷ 4,791 = 6.71

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 improved from 2017 to 2018 and from 2018 to 2019.

Payables Turnover

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

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Cost of sales 17,136  16,682  16,001  15,040  15,383 
Accounts payable 2,228  2,266  1,945  1,798  1,694 
Short-term Activity Ratio
Payables turnover1 7.69 7.36 8.23 8.36 9.08
Benchmarks
Payables Turnover, Competitors2
General Electric Co. 4.40 5.40 6.07 6.06 6.04
Honeywell International Inc. 4.25 5.18 4.19 4.77 4.79
Payables Turnover, Sector
General Industrials 4.67 5.53 5.72 5.91 5.96
Payables Turnover, Industry
Industrials 6.32 6.56 6.61 7.35 7.67

Based on: 10-K (filing date: 2020-02-06), 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).

1 2019 Calculation
Payables turnover = Cost of sales ÷ Accounts payable
= 17,136 ÷ 2,228 = 7.69

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 2017 to 2018 but then slightly increased from 2018 to 2019.

Working Capital Turnover

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

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Current assets 12,971  13,709  14,277  11,726  10,986 
Less: Current liabilities 9,222  7,244  7,687  6,219  7,118 
Working capital 3,749  6,465  6,590  5,507  3,868 
 
Net sales 32,136  32,765  31,657  30,109  30,274 
Short-term Activity Ratio
Working capital turnover1 8.57 5.07 4.80 5.47 7.83
Benchmarks
Working Capital Turnover, Competitors2
General Electric Co. 1.74 2.15 1.73 1.47 1.69
Honeywell International Inc. 5.92 7.69 5.68 5.84 22.94
Working Capital Turnover, Sector
General Industrials 2.60 2.91 2.34 2.06 2.56
Working Capital Turnover, Industry
Industrials 6.90 7.10 4.82 4.81 5.39

Based on: 10-K (filing date: 2020-02-06), 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).

1 2019 Calculation
Working capital turnover = Net sales ÷ Working capital
= 32,136 ÷ 3,749 = 8.57

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 improved from 2017 to 2018 and from 2018 to 2019.

Average Inventory Processing Period

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

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data
Inventory turnover 4.15 3.82 3.97 4.44 4.37
Short-term Activity Ratio (no. days)
Average inventory processing period1 88 96 92 82 83
Benchmarks (no. days)
Average Inventory Processing Period, Competitors2
General Electric Co. 74 76 87 93 99
Honeywell International Inc. 66 54 61 59 60
Average Inventory Processing Period, Sector
General Industrials 74 74 82 85 89
Average Inventory Processing Period, Industry
Industrials 106 94 89 87 92

Based on: 10-K (filing date: 2020-02-06), 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).

1 2019 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 4.15 = 88

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 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

Average Receivable Collection Period

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

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data
Receivables turnover 6.71 6.53 6.45 6.86 7.29
Short-term Activity Ratio (no. days)
Average receivable collection period1 54 56 57 53 50
Benchmarks (no. days)
Average Receivable Collection Period, Competitors2
General Electric Co. 70 64 79 80 93
Honeywell International Inc. 75 66 80 76 76
Average Receivable Collection Period, Sector
General Industrials 68 63 75 74 82
Average Receivable Collection Period, Industry
Industrials 47 46 59 56 56

Based on: 10-K (filing date: 2020-02-06), 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).

1 2019 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 6.71 = 54

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 improved from 2017 to 2018 and from 2018 to 2019.

Operating Cycle

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

No. days

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data
Average inventory processing period 88 96 92 82 83
Average receivable collection period 54 56 57 53 50
Short-term Activity Ratio
Operating cycle1 142 152 149 135 133
Benchmarks
Operating Cycle, Competitors2
General Electric Co. 144 140 166 173 192
Honeywell International Inc. 141 120 141 135 136
Operating Cycle, Sector
General Industrials 142 137 157 159 171
Operating Cycle, Industry
Industrials 153 140 148 143 148

Based on: 10-K (filing date: 2020-02-06), 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).

1 2019 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 88 + 54 = 142

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 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

Average Payables Payment Period

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

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data
Payables turnover 7.69 7.36 8.23 8.36 9.08
Short-term Activity Ratio (no. days)
Average payables payment period1 47 50 44 44 40
Benchmarks (no. days)
Average Payables Payment Period, Competitors2
General Electric Co. 83 68 60 60 60
Honeywell International Inc. 86 70 87 76 76
Average Payables Payment Period, Sector
General Industrials 78 66 64 62 61
Average Payables Payment Period, Industry
Industrials 58 56 55 50 48

Based on: 10-K (filing date: 2020-02-06), 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).

1 2019 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 7.69 = 47

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

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data
Average inventory processing period 88 96 92 82 83
Average receivable collection period 54 56 57 53 50
Average payables payment period 47 50 44 44 40
Short-term Activity Ratio
Cash conversion cycle1 95 102 105 91 93
Benchmarks
Cash Conversion Cycle, Competitors2
General Electric Co. 61 72 106 113 132
Honeywell International Inc. 55 50 54 59 60
Cash Conversion Cycle, Sector
General Industrials 64 71 93 97 110
Cash Conversion Cycle, Industry
Industrials 95 84 93 93 100

Based on: 10-K (filing date: 2020-02-06), 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).

1 2019 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 88 + 5447 = 95

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 improved from 2017 to 2018 and from 2018 to 2019.