Analysis of Short-term (Operating) 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.
Short-term Activity Ratios (Summary)
3M Co., short-term (operating) 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 financial ratios presented indicate varying trends over the analyzed periods, reflecting changes in the company's operational efficiency and working capital management.
- Inventory Turnover
- The inventory turnover ratio shows a general decline from around 4.15 to 3.45 over the periods, signaling a slower rate of inventory movement. Correspondingly, the average inventory processing period extends from approximately 88 days to 106 days, confirming that inventory is being held longer, which may indicate challenges in inventory management or changes in sales patterns.
- Receivables Turnover
- Receivables turnover demonstrates a gradual increase from about 6.45 to over 7.3, suggesting improved efficiency in collecting receivables. This improvement is supported by a reduction in the average receivable collection period, decreasing from about 57 days to close to 50 days, indicating faster cash inflows from customers.
- Payables Turnover
- The payables turnover ratio trends downward from approximately 8.23 to 6.32, reflecting a slower payment pace to suppliers. The average payable payment period increases significantly, rising from around 44 days to near 58 days. This indicates that the company is extending its payment terms or taking longer to settle obligations, which may positively affect cash flow but could impact supplier relationships.
- Working Capital Turnover
- The working capital turnover shows fluctuations with periods of increase and decrease, but generally trends upward towards the later periods, rising from about 4.80 to a peak above 7.6 before settling around 6.5. This implies an improvement in generating sales from working capital, though the variability suggests some instability in efficiency.
- Operating Cycle and Cash Conversion Cycle
- The operating cycle remains relatively stable around 145 to 157 days, indicating consistent overall time from inventory acquisition to cash receipt. However, the cash conversion cycle displays a noticeable reduction from around 105 days to a low of approximately 87 days mid-period before rising again to about 98 days. The shortening cash conversion cycle reflects periods of enhanced liquidity management, though a subsequent increase suggests some loss of this efficiency.
Overall, the data reflects a mixed picture. Improvements in receivables management contrast with slower inventory turnover and extended payable periods. Increased payment delays may aid in cash preservation, but the elongated inventory holding period could imply rising holding costs or demand issues. The fluctuation in working capital turnover and cash conversion cycles indicates varying efficiency in converting resources into cash, underscoring the need for continued monitoring and management of working capital components.
Turnover Ratios
Average No. Days
Inventory Turnover
3M Co., inventory 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) | ||||||||||||||||||||||||||||||
| Cost of sales | 4,728) | 5,093) | 4,826) | 4,698) | 4,853) | 4,719) | 4,525) | 4,388) | 4,303) | 3,805) | 4,109) | 4,325) | 4,188) | 4,313) | 4,310) | 4,060) | 4,159) | 4,227) | 4,236) | 4,080) | 4,045) | 4,007) | 3,869) | |||||||
| Inventories | 5,615) | 5,645) | 5,290) | 4,985) | 4,950) | 4,842) | 4,458) | 4,239) | 3,984) | 4,168) | 4,217) | 4,134) | 4,007) | 4,300) | 4,538) | 4,366) | 4,437) | 4,238) | 4,295) | 4,034) | 3,975) | 3,838) | 3,612) | |||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||||
| Inventory turnover1 | 3.45 | 3.45 | 3.61 | 3.77 | 3.73 | 3.70 | 3.82 | 3.92 | 4.15 | 3.94 | 4.02 | 4.15 | 4.21 | 3.92 | 3.69 | 3.82 | 3.76 | 3.91 | 3.81 | 3.97 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Inventory Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Boeing Co. | 0.78 | 0.74 | 0.74 | 0.75 | 0.77 | 0.76 | 0.74 | 0.78 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 2.36 | 2.40 | 2.46 | 2.53 | 2.44 | 2.49 | 2.46 | 2.55 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 3.95 | 3.87 | 4.03 | 4.48 | 4.73 | 4.86 | 5.12 | 5.88 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 3.10 | 3.04 | 3.25 | 3.40 | 3.21 | 3.28 | 3.46 | 3.80 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 4.09 | 4.06 | 4.20 | 4.55 | 4.72 | 4.88 | 4.85 | 4.94 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 18.09 | 16.20 | 18.12 | 19.45 | 19.81 | 18.64 | 17.58 | 16.01 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 5.03 | 5.14 | 5.33 | 5.65 | 5.57 | 5.49 | 5.48 | 5.11 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
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
Inventory turnover
= (Cost of salesQ3 2022
+ Cost of salesQ2 2022
+ Cost of salesQ1 2022
+ Cost of salesQ4 2021)
÷ Inventories
= (4,728 + 5,093 + 4,826 + 4,698)
÷ 5,615 = 3.45
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in cost of sales, inventories, and inventory turnover ratio over the observed periods.
- Cost of Sales
- The cost of sales displayed moderate fluctuations throughout the timeline. From March 31, 2017, to March 31, 2019, the cost consistently increased, rising from approximately 3.87 billion USD to 4.31 billion USD. This upward trend continued with some variations, peaking around 5.09 billion USD in June 30, 2022, before experiencing a slight decrease to 4.73 billion USD on September 30, 2022. Overall, the cost of sales showed an increasing trend, indicating rising expenses related to product production or procurement over the years.
- Inventories
- Inventories also showed an overall increase during the examined period. Beginning at about 3.61 billion USD on March 31, 2017, inventories increased steadily to around 4.54 billion USD by March 31, 2019. The upward trajectory persisted more sharply towards 5.64 billion USD by June 30, 2022, before a minor decline to 5.62 billion USD in the last quarter. These changes suggest growing inventory levels, which might indicate either stockpiling or slower inventory turnover.
- Inventory Turnover Ratio
- The inventory turnover ratio, available from March 31, 2018, shows a slight decreasing trend. Initially, the ratio hovered around 3.97, dropping gradually to approximately 3.45 by the end of the period on September 30, 2022. Although values fluctuated quarter to quarter, the general decline points to a slower rate of inventory turnover relative to sales, potentially signaling increasing inventory holding periods or decreased efficiency in inventory management.
In summary, the data indicates that both cost of sales and inventory levels increased steadily over the analyzed timeframe, while inventory turnover exhibited a slight decline. This combination may reflect growing production or procurement costs alongside expanding inventories that are not being converted to sales as rapidly as before, suggesting a need to evaluate inventory and supply chain efficiencies.
Receivables Turnover
3M Co., receivables 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) | |||||||
| Accounts receivable, net of allowances | 4,722) | 4,914) | 4,815) | 4,660) | 4,916) | 4,991) | 4,817) | 4,705) | 4,623) | 4,459) | 4,821) | 4,791) | 5,020) | 5,374) | 5,173) | 5,020) | 5,329) | 5,383) | 5,252) | 4,911) | 5,156) | 4,919) | 4,722) | |||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||||
| Receivables turnover1 | 7.36 | 7.14 | 7.34 | 7.59 | 7.19 | 6.96 | 6.84 | 6.84 | 6.86 | 7.03 | 6.71 | 6.71 | 6.37 | 5.98 | 6.25 | 6.53 | 6.16 | 6.10 | 6.14 | 6.45 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Boeing Co. | 22.98 | 20.27 | 25.37 | 23.58 | 27.95 | 24.76 | 23.97 | 29.75 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 6.59 | 6.10 | 5.46 | 5.68 | 5.97 | 5.51 | 5.07 | 5.33 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 5.28 | 5.15 | 5.39 | 5.95 | 5.75 | 5.72 | 5.79 | 6.15 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 4.19 | 4.39 | 4.43 | 4.55 | 4.83 | 4.74 | 4.59 | 4.37 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 4.74 | 4.45 | 4.82 | 5.04 | 4.78 | 4.89 | 4.89 | 4.78 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 26.06 | 18.87 | 26.02 | 34.15 | 29.27 | 25.59 | 29.81 | 33.06 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 7.15 | 6.28 | 7.15 | 6.66 | 6.69 | 6.99 | 6.03 | 6.11 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
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
Receivables turnover
= (Net salesQ3 2022
+ Net salesQ2 2022
+ Net salesQ1 2022
+ Net salesQ4 2021)
÷ Accounts receivable, net of allowances
= (8,619 + 8,702 + 8,829 + 8,612)
÷ 4,722 = 7.36
2 Click competitor name to see calculations.
The financial data indicate that net sales have experienced fluctuations over the observed periods. Initially, net sales showed a general upward trend from March 2017 through mid-2018, increasing from 7,685 million USD to a peak around 8,390 million USD. After this peak, sales demonstrated variability with some quarterly declines, notably in late 2018 and mid-2020. Despite these fluctuations, net sales reached another high point towards the end of 2021, surpassing 8,900 million USD before slightly declining again in 2022.
Accounts receivable, net of allowances, followed a somewhat analogous pattern to net sales, though less volatile. Starting at 4,722 million USD in early 2017, receivables rose steadily through 2018, peaking near 5,383 million USD, followed by a gradual decline into 2020. After a low point during mid-2020, accounts receivable began to recover, though remaining relatively stable around the 4,800 to 4,900 million USD range through 2021 and into 2022.
The receivables turnover ratio provides additional insight into the management of credit and collections. From mid-2017 onwards, this ratio displays a general upward trend, moving from around 6.45 to above 7.3 by late 2022. This suggests an improvement in the efficiency of receivables collection over time, with customers generally paying more quickly relative to prior periods. Minor fluctuations occurred, but the overall direction indicates enhanced credit management performance.
- Net Sales Trends
- An initial increase through early 2018, peaking near 8,390 million USD, followed by moderate fluctuations. A significant decline occurred in mid-2020, coinciding with global economic challenges, before recovery and new highs above 8,900 million USD by late 2021. Sales slightly decreased entering 2022.
- Accounts Receivable Patterns
- Generally increasing through 2018 with a peak near 5,383 million USD, then declining through 2020, potentially due to improved collections or decreased sales activity. Stabilization occurred post-2020 with values around 4,800–4,900 million USD, reflecting controlled receivables levels.
- Receivables Turnover Analysis
- Steady improvement noted from 6.45 in mid-2017 to over 7.3 in late 2022, indicating more effective receivables management and quicker conversion into cash. The upward trajectory signifies enhanced operational efficiency in credit policies or collections processes.
Payables Turnover
3M Co., payables 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) | ||||||||||||||||||||||||||||||
| Cost of sales | 4,728) | 5,093) | 4,826) | 4,698) | 4,853) | 4,719) | 4,525) | 4,388) | 4,303) | 3,805) | 4,109) | 4,325) | 4,188) | 4,313) | 4,310) | 4,060) | 4,159) | 4,227) | 4,236) | 4,080) | 4,045) | 4,007) | 3,869) | |||||||
| Accounts payable | 3,063) | 3,273) | 3,164) | 2,994) | 2,862) | 2,931) | 2,670) | 2,561) | 2,208) | 1,975) | 2,207) | 2,228) | 2,079) | 2,130) | 2,309) | 2,266) | 2,029) | 1,871) | 1,874) | 1,945) | 1,824) | 1,782) | 1,701) | |||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||||
| Payables turnover1 | 6.32 | 5.95 | 6.04 | 6.28 | 6.46 | 6.12 | 6.37 | 6.48 | 7.49 | 8.32 | 7.67 | 7.69 | 8.11 | 7.91 | 7.26 | 7.36 | 8.23 | 8.87 | 8.73 | 8.23 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Payables Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Boeing Co. | 6.36 | 6.17 | 6.73 | 6.40 | 6.20 | 5.45 | 4.90 | 4.94 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 4.81 | 4.72 | 4.43 | 4.36 | 4.61 | 4.57 | 4.46 | 4.75 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 4.61 | 4.43 | 4.67 | 4.75 | 5.11 | 5.22 | 5.66 | 6.24 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 3.14 | 3.14 | 3.32 | 3.32 | 3.33 | 3.35 | 3.56 | 3.67 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 3.68 | 3.63 | 3.66 | 3.61 | 3.83 | 3.76 | 3.86 | 3.86 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 21.48 | 24.07 | 21.92 | 74.34 | 37.83 | 36.15 | 30.31 | 64.48 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 5.82 | 5.36 | 6.28 | 5.93 | 6.06 | 6.52 | 5.67 | 5.56 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
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
Payables turnover
= (Cost of salesQ3 2022
+ Cost of salesQ2 2022
+ Cost of salesQ1 2022
+ Cost of salesQ4 2021)
÷ Accounts payable
= (4,728 + 5,093 + 4,826 + 4,698)
÷ 3,063 = 6.32
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals distinct trends across the cost of sales, accounts payable, and payables turnover ratio over the observed periods.
- Cost of Sales
- Cost of sales generally shows a pattern of steady growth from early 2017 until the end of 2019, rising from approximately 3,869 million USD to around 4,325 million USD. A noticeable decline occurs during 2020, most likely influenced by external factors, with values dipping to as low as 3,805 million USD in mid-2020. Following this downturn, the cost of sales resumes an upward trajectory from late 2020 into 2022, reaching peaks around 5,093 million USD in mid-2022 before slightly falling back to 4,728 million USD by September 2022.
- Accounts Payable
- Accounts payable also display overall growth throughout the time frame. Starting near 1,701 million USD in the first quarter of 2017, the figure rises with some fluctuations to a peak exceeding 3,273 million USD in mid-2022. A distinct increase is visible beginning in late 2019 and continuing through 2021, with the figure nearly doubling in this period. Minor volatility is apparent but does not significantly interrupt the upward trend.
- Payables Turnover Ratio
- The payables turnover ratio, available from mid-2017 onward, shows a declining trend over the years. Initially, the ratio remained relatively high, near or above 7.5 times annually, indicating quicker payment cycles. However, from 2019 onwards, the ratio steadily decreases to slightly below 6 times by mid-2022, reflecting slower payment turnover. This decrease in the payables turnover ratio may suggest a lengthening of payment periods or changes in supplier credit terms over the analysis horizon.
Overall, the data indicates a growth trend in both cost of sales and accounts payable, alongside a gradual slowdown in the rate at which payables are settled. The decline observed in cost of sales during 2020 aligns temporally with broader economic disruptions, followed by recovery and growth. The lengthening payment cycles may have implications for working capital management and supplier relationships.
Working Capital Turnover
3M Co., working capital 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) | ||||||||||||||||||||||||||||||
| Current assets | 14,895) | 14,514) | 14,452) | 15,403) | 16,426) | 16,343) | 15,345) | 14,982) | 14,110) | 14,106) | 15,090) | 12,971) | 18,020) | 14,051) | 14,374) | 13,709) | 14,419) | 13,890) | 14,818) | 14,277) | 13,656) | 12,641) | 11,901) | |||||||
| Less: Current liabilities | 9,543) | 9,896) | 9,152) | 9,035) | 9,635) | 9,440) | 8,363) | 7,948) | 7,410) | 7,282) | 9,134) | 9,222) | 7,821) | 7,265) | 7,125) | 7,244) | 7,336) | 8,902) | 8,959) | 7,687) | 6,598) | 5,697) | 5,995) | |||||||
| Working capital | 5,352) | 4,618) | 5,300) | 6,368) | 6,791) | 6,903) | 6,982) | 7,034) | 6,700) | 6,824) | 5,956) | 3,749) | 10,199) | 6,786) | 7,249) | 6,465) | 7,083) | 4,988) | 5,859) | 6,590) | 7,058) | 6,944) | 5,906) | |||||||
| 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) | |||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||||
| Working capital turnover1 | 6.50 | 7.60 | 6.67 | 5.55 | 5.20 | 5.03 | 4.72 | 4.58 | 4.73 | 4.59 | 5.43 | 8.57 | 3.13 | 4.73 | 4.46 | 5.07 | 4.63 | 6.58 | 5.50 | 4.80 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Boeing Co. | 3.13 | 2.87 | 2.51 | 2.34 | 2.02 | 2.00 | 1.88 | 1.69 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 4.35 | 3.93 | 3.83 | 3.54 | 2.87 | 2.80 | 2.52 | 2.84 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 10.69 | — | — | 65.65 | 12.41 | 21.65 | 5.34 | 5.42 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 13.29 | 10.55 | 7.14 | 4.94 | 1.57 | 1.57 | 1.27 | 2.26 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 7.91 | 8.84 | 8.07 | 5.86 | 5.94 | 4.52 | 4.27 | 3.64 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 14.03 | 14.28 | 15.14 | 11.52 | 10.48 | 12.30 | 11.93 | 12.01 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 19.15 | 17.77 | 11.41 | 9.75 | 8.11 | 10.24 | 9.77 | 7.52 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
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
Working capital turnover
= (Net salesQ3 2022
+ Net salesQ2 2022
+ Net salesQ1 2022
+ Net salesQ4 2021)
÷ Working capital
= (8,619 + 8,702 + 8,829 + 8,612)
÷ 5,352 = 6.50
2 Click competitor name to see calculations.
- Working Capital
- The working capital exhibits fluctuations over the quarters, with levels generally ranging between approximately $4.6 billion and $10.2 billion. From early 2017 to late 2019, working capital shows a cyclical pattern with notable peaks in September 2019 ($10.2 billion) and troughs such as December 2019 ($3.7 billion). Post-2019, working capital stabilizes within a narrower band around $5.3 billion to $7.0 billion through 2020 and 2021, before trending downward again in mid-2022 to a low near $4.6 billion, followed by a slight increase by the third quarter of 2022.
- Net Sales
- Net sales maintain relative stability across the periods, averaging between approximately $7.6 billion and $8.9 billion quarterly. The data reflect moderate growth from 2017 through 2019, peaking near $8.9 billion in late 2021. A temporary decline is visible in mid-2020 with sales falling to about $7.2 billion, likely corresponding to market disruptions. Sales quickly recover in the following quarters, achieving new highs through 2021 before a slight decline appears again in 2022, settling around $8.6 billion by the last period observed.
- Working Capital Turnover
- This ratio, calculated only for selected quarters starting late 2017, demonstrates a variable but generally increasing trend from 3.13 up to 8.57, with high volatility. Early observed quarters show values between approximately 4.5 and 6.6, with a striking peak in March 2020 reaching 8.57, aligning with a low point in working capital. Subsequently, the ratio reduces but then rises steadily again through 2021, reaching above 7 by mid-2022, indicating improved efficiency in using working capital to generate sales during this period.
- Summary of Trends
- The data show that while net sales remain relatively steady with mild growth and cyclical dips, working capital varies more substantially, suggesting changing management of current assets and liabilities. The marked rise in working capital turnover during some quarters reflects periods of heightened operational efficiency, particularly notable during the challenging market period around early 2020. Recent quarters indicate continued efforts towards optimizing working capital relative to sales, although working capital levels have decreased somewhat by mid-2022.
Average Inventory Processing Period
3M Co., average inventory processing period 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 | ||||||||||||||||||||||||||||||
| Inventory turnover | 3.45 | 3.45 | 3.61 | 3.77 | 3.73 | 3.70 | 3.82 | 3.92 | 4.15 | 3.94 | 4.02 | 4.15 | 4.21 | 3.92 | 3.69 | 3.82 | 3.76 | 3.91 | 3.81 | 3.97 | — | — | — | |||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||||||
| Average inventory processing period1 | 106 | 106 | 101 | 97 | 98 | 99 | 96 | 93 | 88 | 93 | 91 | 88 | 87 | 93 | 99 | 96 | 97 | 93 | 96 | 92 | — | — | — | |||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||||||||
| Average Inventory Processing Period, Competitors2 | ||||||||||||||||||||||||||||||
| Boeing Co. | 468 | 494 | 493 | 486 | 475 | 478 | 496 | 467 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 155 | 152 | 148 | 144 | 150 | 146 | 149 | 143 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 92 | 94 | 90 | 82 | 77 | 75 | 71 | 62 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 118 | 120 | 112 | 107 | 114 | 111 | 105 | 96 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 89 | 90 | 87 | 80 | 77 | 75 | 75 | 74 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 20 | 23 | 20 | 19 | 18 | 20 | 21 | 23 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 73 | 71 | 69 | 65 | 65 | 66 | 67 | 71 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
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
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 3.45 = 106
2 Click competitor name to see calculations.
The inventory turnover ratio exhibits a generally declining trend from early 2017 through 2022. Beginning at around 3.97 in the first quarter of 2017, the ratio fluctuates moderately within the range of approximately 3.7 to 4.2 over the periods, but shows a gradual decrease towards 3.45 by the third quarter of 2022. This suggests a slight reduction in the company's efficiency in turning over inventory.
Correspondingly, the average inventory processing period, which is the inverse metric indicating the number of days inventory is held before sale, displays an overall upward trend. Starting from 92 days in early 2017, the period extends to around 106 days by the third quarter of 2022. This lengthening of inventory processing time aligns with the observed decline in inventory turnover ratio, indicating that inventory is being held for longer durations over time.
Throughout the analyzed quarters, the two metrics manifest an inverse relationship as expected: as the inventory turnover decreases, the average inventory processing period increases. Notably, some fluctuations occur within this pattern, with short-term improvements in turnover being mirrored by slight reductions in processing days, particularly visible around the years 2018 and 2019.
Overall, the data imply a gradual easing in inventory management effectiveness, with the company holding inventory for longer periods and turning it over less frequently as time progresses towards 2022. This could reflect changes in demand, supply chain dynamics, or inventory policy adjustments requiring further qualitative investigation.
Average Receivable Collection Period
3M Co., average receivable collection period 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 | ||||||||||||||||||||||||||||||
| Receivables turnover | 7.36 | 7.14 | 7.34 | 7.59 | 7.19 | 6.96 | 6.84 | 6.84 | 6.86 | 7.03 | 6.71 | 6.71 | 6.37 | 5.98 | 6.25 | 6.53 | 6.16 | 6.10 | 6.14 | 6.45 | — | — | — | |||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||||||
| Average receivable collection period1 | 50 | 51 | 50 | 48 | 51 | 52 | 53 | 53 | 53 | 52 | 54 | 54 | 57 | 61 | 58 | 56 | 59 | 60 | 59 | 57 | — | — | — | |||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||||||||
| Average Receivable Collection Period, Competitors2 | ||||||||||||||||||||||||||||||
| Boeing Co. | 16 | 18 | 14 | 15 | 13 | 15 | 15 | 12 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 55 | 60 | 67 | 64 | 61 | 66 | 72 | 68 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 69 | 71 | 68 | 61 | 63 | 64 | 63 | 59 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 87 | 83 | 82 | 80 | 76 | 77 | 80 | 83 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 77 | 82 | 76 | 72 | 76 | 75 | 75 | 76 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 14 | 19 | 14 | 11 | 12 | 14 | 12 | 11 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 51 | 58 | 51 | 55 | 55 | 52 | 61 | 60 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
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
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 7.36 = 50
2 Click competitor name to see calculations.
- Receivables Turnover Ratio
- The receivables turnover ratio shows an overall increasing trend from March 31, 2017, to September 30, 2022. Starting at 6.45 in early 2017, the ratio experienced slight fluctuations, dipping briefly below 6.0 in the third quarter of 2019 but recovered steadily afterward. By late 2021 and into mid-2022, the ratio rose above 7.0, peaking at 7.59 in September 2021 before settling around 7.14 to 7.36 in mid-2022. This upward trend indicates an improvement in the efficiency of collecting receivables over the period.
- Average Receivable Collection Period
- The average receivable collection period, expressed in days, exhibited a general downward trend from 2017 through 2022. The period initially ranged around 57 to 60 days in 2017 and early 2018, fluctuating slightly but with a tendency to shorten over time. By 2020, the collection period stabilized near 52 to 54 days, and from early 2021 onward, it consistently remained in the low 50s. The lowest measurement observed was 48 days in the first quarter of 2022. This pattern corresponds inversely to the receivables turnover ratio, confirming increased efficiency in receivables collection.
- Overall Insights
- The data indicates ongoing improvements in accounts receivable management across the timeline. The increase in receivables turnover ratio alongside the decrease in average collection days suggests that the company has enhanced its credit policy execution and collections processes. The periodic fluctuations are relatively minor, and the consistent trends post-2019 imply a strengthening operational performance with respect to managing customer credit and timely cash inflows.
Operating Cycle
3M Co., operating cycle calculation (quarterly data)
No. days
| 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 | ||||||||||||||||||||||||||||||
| Average inventory processing period | 106 | 106 | 101 | 97 | 98 | 99 | 96 | 93 | 88 | 93 | 91 | 88 | 87 | 93 | 99 | 96 | 97 | 93 | 96 | 92 | — | — | — | |||||||
| Average receivable collection period | 50 | 51 | 50 | 48 | 51 | 52 | 53 | 53 | 53 | 52 | 54 | 54 | 57 | 61 | 58 | 56 | 59 | 60 | 59 | 57 | — | — | — | |||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||||
| Operating cycle1 | 156 | 157 | 151 | 145 | 149 | 151 | 149 | 146 | 141 | 145 | 145 | 142 | 144 | 154 | 157 | 152 | 156 | 153 | 155 | 149 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Operating Cycle, Competitors2 | ||||||||||||||||||||||||||||||
| Boeing Co. | 484 | 512 | 507 | 501 | 488 | 493 | 511 | 479 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 210 | 212 | 215 | 208 | 211 | 212 | 221 | 211 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 161 | 165 | 158 | 143 | 140 | 139 | 134 | 121 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 205 | 203 | 194 | 187 | 190 | 188 | 185 | 179 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 166 | 172 | 163 | 152 | 153 | 150 | 150 | 150 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 34 | 42 | 34 | 30 | 30 | 34 | 33 | 34 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 124 | 129 | 120 | 120 | 120 | 118 | 128 | 131 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
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
Operating cycle = Average inventory processing period + Average receivable collection period
= 106 + 50 = 156
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period displays notable variability over the observed quarters. Starting with a value of 92 days in March 2018, there is an upward trend reaching a peak of 99 days by June 2019. Subsequently, a decline occurs, with the period reducing to 87 days by December 2019. In 2020, the period fluctuates around the low 90s, showing some recovery to 93 days by March 2020. From mid-2020 onwards, the metric exhibits a gradual increasing trend, culminating at 106 days by both September and December 2022. Overall, the data indicates an increasing duration in inventory processing in the later periods, implying a slower turnover of inventory.
- Average Receivable Collection Period
- The average receivable collection period remains relatively stable throughout the timeline. It fluctuates modestly between 50 and 61 days, with an overall slight downward tendency. Initially valued at 57 days in March 2018, it rises to a short-term peak of 61 days in September 2019. Following this, a gradual decrease is observed, reaching lows around 50 days by March 2022. These patterns suggest consistent and moderately efficient receivables management, with some improvement toward quicker collection in the later periods.
- Operating Cycle
- The operating cycle generally follows the combined movements of the inventory processing and receivable collection periods. Starting at 149 days in March 2018, it increases to a high of 157 days by June 2019. Thereafter, it decreases to around 142 days by December 2019, followed by stabilization near 145 days throughout 2020. From 2021 forward, the operating cycle shows a renewed increase, peaking again at 157 days in June 2022 before a slight reduction to 156 days by September 2022. This trend denotes an overall lengthening operating cycle in recent years, influenced primarily by changes in inventory processing duration.
Average Payables Payment Period
3M Co., average payables payment period 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 | ||||||||||||||||||||||||||||||
| Payables turnover | 6.32 | 5.95 | 6.04 | 6.28 | 6.46 | 6.12 | 6.37 | 6.48 | 7.49 | 8.32 | 7.67 | 7.69 | 8.11 | 7.91 | 7.26 | 7.36 | 8.23 | 8.87 | 8.73 | 8.23 | — | — | — | |||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||||||
| Average payables payment period1 | 58 | 61 | 60 | 58 | 57 | 60 | 57 | 56 | 49 | 44 | 48 | 47 | 45 | 46 | 50 | 50 | 44 | 41 | 42 | 44 | — | — | — | |||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||||||||
| Average Payables Payment Period, Competitors2 | ||||||||||||||||||||||||||||||
| Boeing Co. | 57 | 59 | 54 | 57 | 59 | 67 | 74 | 74 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 76 | 77 | 82 | 84 | 79 | 80 | 82 | 77 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 79 | 82 | 78 | 77 | 71 | 70 | 65 | 58 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 116 | 116 | 110 | 110 | 109 | 109 | 103 | 100 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 99 | 101 | 100 | 101 | 95 | 97 | 95 | 95 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 17 | 15 | 17 | 5 | 10 | 10 | 12 | 6 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 63 | 68 | 58 | 62 | 60 | 56 | 64 | 66 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
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
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 6.32 = 58
2 Click competitor name to see calculations.
The analysis of the payables-related financial ratios over the observed quarterly periods reveals notable trends and fluctuations that highlight changes in the company's payment dynamics with its suppliers.
- Payables Turnover Ratio
- The payables turnover ratio data begins from the first quarter of 2018. Initially, the ratio was relatively high, around 8.23 to 8.87 times per year in the first three quarters of 2018. This indicates a faster rate of paying off suppliers during that period. However, from late 2018 into 2019, the ratio shows a slight decline but remains relatively stable in the 7.26 to 8.11 range, suggesting consistent payment behavior.
- Starting in 2020, a subtle decrease in the payables turnover ratio is evident, fluctuating mostly between 7.49 and 8.32 during the early quarters. This is followed by a more pronounced downward trend from mid-2020 through 2022, where the ratio consistently falls from 6.48 to a low of about 5.95 before a modest rebound to 6.32 by the third quarter of 2022. This downward trend signifies that the company is taking longer to pay its suppliers over time, lowering the frequency of payables turnover.
- Average Payables Payment Period (Days)
- The average payables payment period offers a complementary perspective by measuring the days taken to pay suppliers. Starting in early 2018 at 44 days, the metric shows some variability but generally remains within the mid-40s range during 2018 and 2019, indicating stable payment terms consistent with the payables turnover ratio.
- From 2020 onward, there is a clear increasing trend in the payment period, rising from about 44 days to as many as 61 days by late 2022. This indicates a systematic extension in the duration taken to settle payables, corroborating the declining payables turnover ratio. Slight fluctuations occur but the overall direction is towards longer payment terms.
- General Insights
- Overall, the data suggests that the company maintained relatively steady payables management through 2018 and 2019 but shifted towards longer payment cycles starting in 2020. This extension could be a strategic decision to improve cash flow or respond to external pressures. The inverse movements of the payables turnover ratio and the average payment period align logically, confirming increased days payable outstanding and decreased turnover frequency.
- Such a trend can affect supplier relationships and working capital management and should be monitored carefully to balance liquidity needs against supplier credit terms.
Cash Conversion Cycle
3M Co., cash conversion cycle calculation (quarterly data)
No. days
| 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 | ||||||||||||||||||||||||||||||
| Average inventory processing period | 106 | 106 | 101 | 97 | 98 | 99 | 96 | 93 | 88 | 93 | 91 | 88 | 87 | 93 | 99 | 96 | 97 | 93 | 96 | 92 | — | — | — | |||||||
| Average receivable collection period | 50 | 51 | 50 | 48 | 51 | 52 | 53 | 53 | 53 | 52 | 54 | 54 | 57 | 61 | 58 | 56 | 59 | 60 | 59 | 57 | — | — | — | |||||||
| Average payables payment period | 58 | 61 | 60 | 58 | 57 | 60 | 57 | 56 | 49 | 44 | 48 | 47 | 45 | 46 | 50 | 50 | 44 | 41 | 42 | 44 | — | — | — | |||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||||
| Cash conversion cycle1 | 98 | 96 | 91 | 87 | 92 | 91 | 92 | 90 | 92 | 101 | 97 | 95 | 99 | 108 | 107 | 102 | 112 | 112 | 113 | 105 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Cash Conversion Cycle, Competitors2 | ||||||||||||||||||||||||||||||
| Boeing Co. | 427 | 453 | 453 | 444 | 429 | 426 | 437 | 405 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 134 | 135 | 133 | 124 | 132 | 132 | 139 | 134 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 82 | 83 | 80 | 66 | 69 | 69 | 69 | 63 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 89 | 87 | 84 | 77 | 81 | 79 | 82 | 79 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 67 | 71 | 63 | 51 | 58 | 53 | 55 | 55 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 17 | 27 | 17 | 25 | 20 | 24 | 21 | 28 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 61 | 61 | 62 | 58 | 60 | 62 | 64 | 65 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
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
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 106 + 50 – 58 = 98
2 Click competitor name to see calculations.
- Average Inventory Processing Period
-
The average inventory processing period fluctuates over the observed quarters, starting without data in early 2017 but then stabilizing around the low to mid-90-day range from March 2018 onward. There is a slight downward trend evident around the end of 2019, reaching approximately 87 days, followed by a gradual increase that peaks around 106 days in the last two reported quarters of 2022. This suggests a lengthening in the time inventory remains in the system toward the most recent periods.
- Average Receivable Collection Period
-
The receivable collection period shows moderate variability over the quarters, initially around the high 50s to low 60s days. From early 2018 to late 2019, there is a gradual decrease from about 59-61 days down to the low 50s, indicating improved collection efficiency. This trend stabilizes with minor fluctuations around the low 50-day mark through 2021 and into 2022, suggesting consistent credit and collection practices in those periods.
- Average Payables Payment Period
-
The payables payment period displays a general increasing trend across the observed timeframe. Early periods in 2017 and 2018 show lower values in the low 40s to mid-40s days. Starting in mid-2019, the payment period extends steadily, moving from the mid-40s to values exceeding 60 days by late 2022. This indicates a lengthening time before settling payables, potentially reflecting extended supplier payment terms or strategic cash management initiatives.
- Cash Conversion Cycle
-
The cash conversion cycle (CCC) experiences fluctuations but generally exhibits a downward trend over the period analyzed. Early in the data range, CCC values hover around 105 to 113 days, with a reduction movement visible around late 2019 and 2020, bringing the cycle down to the low 90s days. The CCC stabilizes around the 90-day mark during 2020 and early 2021 before slightly increasing again to approach the high 90s days in 2022. The overall trend implies enhanced efficiency in managing working capital, balancing the timing of inventory, receivables, and payables more effectively over time, despite some reversals in the latest periods.