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)
Inventory Turnover
Receivables Turnover
Payables Turnover
Working Capital Turnover
Average Inventory Processing Period
Average Receivable Collection Period
Operating Cycle
Average Payables Payment Period
Cash Conversion Cycle

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

		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		Dec 31, 2016	Sep 30, 2016	Jun 30, 2016	Mar 31, 2016		Dec 31, 2015	Sep 30, 2015	Jun 30, 2015	Mar 31, 2015
	Turnover Ratios
	Inventory turnover
	Receivables turnover
	Payables turnover
	Working capital turnover
	Average No. Days
	Average inventory processing period
	Add: Average receivable collection period
	Operating cycle
	Less: Average payables payment period
	Cash conversion cycle

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 Q3 2019 to Q4 2019 and from Q4 2019 to Q1 2020.
Receivables turnover	An activity ratio equal to revenue divided by receivables.	3M Co.’s receivables turnover ratio improved from Q3 2019 to Q4 2019 and from Q4 2019 to Q1 2020.
Payables turnover	An activity ratio calculated as cost of goods sold divided by payables.	3M Co.’s payables turnover ratio decreased from Q3 2019 to Q4 2019 and from Q4 2019 to Q1 2020.
Working capital turnover	An activity ratio calculated as revenue divided by working capital.	3M Co.’s working capital turnover ratio improved from Q3 2019 to Q4 2019 but then slightly deteriorated from Q4 2019 to Q1 2020 not reaching Q3 2019 level.

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 Q3 2019 to Q4 2019 and from Q4 2019 to Q1 2020.
Average receivable collection period	An activity ratio equal to the number of days in the period divided by receivables turnover.
Operating cycle	Equal to average inventory processing period plus average receivables collection period.	3M Co.’s operating cycle improved from Q3 2019 to Q4 2019 but then deteriorated significantly from Q4 2019 to Q1 2020.
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.	3M Co.’s number of days of payables outstanding increased from Q3 2019 to Q4 2019 and from Q4 2019 to Q1 2020.
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., inventory turnover calculation (quarterly data)

		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		Dec 31, 2016	Sep 30, 2016	Jun 30, 2016	Mar 31, 2016		Dec 31, 2015	Sep 30, 2015	Jun 30, 2015	Mar 31, 2015
	Selected Financial Data (US$ in millions)
	Cost of sales
	Inventories
	Short-term Activity Ratio
	Inventory turnover¹
	Benchmarks
	Inventory Turnover, Competitors²
	General Electric Co.
	Honeywell International Inc.

¹ Q1 2020 Calculation
Inventory turnover = (Cost of sales_{Q1 2020} + Cost of sales_{Q4 2019} + Cost of sales_{Q3 2019} + Cost of sales_{Q2 2019}) ÷ Inventories
= ( + + + ) ÷ =