3M Financial Statements and Financial Ratios Analyzed from 2015 to 2019
Thanks for visiting my 3M Financial Report page. On this page, you will be able to find preliminary information about 3M current financial performance as well as some historical track records and trends.
For a more detailed examination of 3M financial performance, please check out the "Financial Report". In this report, written by myself, Paul Borosky, MBA., Doctoral Candidate, and published author, you will find:
- Summarized income statement for the last 5 years.
- Summarized balance sheet for the last 5 years.
- Summary analysis by myself of important income statement, balance sheet, and financial ratio trends and other happenings.
- Five year’s worth of over twenty common financial ratios presented with formulas, calculations, and analysis tips for each ratio.
- Line by line description, explanation, and analysis tip for most financial statement line items and financial ratios.
- Professional financial analysis tips provided in each section to help YOU conduct your OWN financial analysis!
- Each section includes an “in other words” segment. This is were I use plain English to explain concepts.
Enjoy the preliminary information and for a more detailed analysis, buy the financial report!
Sample Financial Report
Sample Table of Contents for Financial Reports
Table of Contents
Page Count: 88 Pages
- Disclaimer 3
About the Author 7
Company Summary 8
Financial Statement Introduction 10
Income Statement 11
Walmart’s Income Statement – Summary Analysis 12
Income Statement Discussion 12
Balance Sheet 21
Balance Sheet – Summary Analysis 22
Balance Sheet Discussion 23
Financial Ratios 38
Liquidity Ratios 39
Liquidity Ratios - Summary Analysis 39
Liquidity Ratios Discussion 40
Current Ratio 40
Quick Ratio 41
Cash Ratio 42
Other Liquidity Ratios 42
Net Operating Working Capital 42
Asset Ratios 44
Asset Utilization Ratios - Summary Analysis 45
Asset Utilization Ratios Discussion 46
Total Asset Turnover 46
Fixed Asset Turnover 46
Days Sales Outstanding 47
Inventory Turnover 48
Accounts Receivable Turnover 49
Accounts Payable Turnover 50
Other Asset Ratio Calculations 50
Working Capital Turnover 50
Average Days in Inventory 51
Average Days Payable 51
Profitability Ratios 52
Profitability Ratios - Summary Analysis 53
Profitability Ratios Discussion 53
Return on Assets (ROA) 53
Return on Equity (ROE) 54
Profit Margin 55
Gross Profit Margin 56
Operating Profit Margin 56
Basic Earnings Power 57
Capital Employed 58
Debt Ratios 59
Walmart’s Debt Ratios - Summary Analysis 59
Debt Ratios Discussion 60
Long-Term Debt Ratio 60
Debt to Equity Ratio 61
Times Interest Earned 61
Book Value of WACC 63
Free Cash Flow (FCF) 65
Free Cash Flows – 2016 - 2020 65
Free Cash Flows – 5 Year Projections 66
Income Statement – Projections for 5 years 67
Income Statement – 5 Year Projections 67
Balance Sheet – Projections for 5 years 68
Balance Sheet – 5 Year Projections 68
Company Valuation and Intrinsic Stock Price 70
Appendix 1: Summarized Income Statement 71
Appendix 2: Income Statement – Percent of Sales 72
Appendix 3: Income Statement – Year over Year Growth 73
Appendix 4: Summarized Balance Sheet 74
Appendix 5: Balance Sheet as Percent of Total Assets 76
Appendix 6: Summarized Financial Ratios 77
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3M - Brief Summary
3M is headquartered in St. Paul Minnesota. The organization competes in the industrial sector of the economy specifically the specialty industrial machinery. Currently, 3M employs approximately 96,000 employees. Important revenue generators for 3M would be safety and industrial equipment, healthcare products, and consumer supplies.
From a financial perspective, 3M has a market capitalization of approximately $91.8 billion. The organization has a beta of .99. This indicates that the company has a similar risk factor as compared to the overall market. The organization's stock price has ranged from $114.04 to $182.55 in the last 52 weeks. As for their dividend yield, 3M currently offers a 3.69% dividend yield.
3M Financial Report Sources
“3M 2019 Company Analysis… For Beginners: Financial Statements and Financial Ratios: Defined, Discussed, and Analyzed for 5 Years” was written by, Paul Borosky, MBA. and owner of Quality Business Plan. In this report, I used 3M's 2018 10k, 2017 10k annual report, 2016 10k annual report, 2015 10k annual report, and 2019 10k annual report as the basis for information gathering.
Section 1: 3M Income Statement Analyzed 2015 to 2019
In this section, I walk through a broad definition as to what an income statement is and why it is important. From this, I then discuss and define income statement line items, such as revenues, gross profits, etc. in detail. After each line item is defined and discussed, I finally offer a summary analysis of 3M's important income statement line item trends from 2015 to 2019, in most cases.
3M Revenue Growth.
In 2015, 3M had revenues of approximately $30.2 billion. In the next year, 3M’s revenue would decrease slightly to $30.1 billion. In the next three years, the revenues would slowly increase reaching $32.7 billion in 2018 only to fall slightly to $32.1 billion in 2019. In reviewing the revenues for the company, it seems like the company is holding steady with revenues. From an investor’s perspective, this should be more than worrisome. Either company is growing or shrinking. After holding steady, then one of the two trends is bound to set in. From this, investors should approach this organization with a healthy dose of risk expected.
3M Summary Income Statement 2019
|R & D||1,911||1,821||1,870||1,735||1,763|
Section 2: 3M Balance Sheet Analyzed from 2015 to 2019
For 3M balance sheet, I again go through each important line item from the balance sheet. In reviewing each line item, I will define their balance sheet line item, such as cash, property, plant and equipment, and liabilities between 2015 to 2019. Next, I then offer a summary analysis of their important balance sheet line items.
3M Short-Term Investments.
3M had approximately $118 million in short-term investments in 2015. In the next two years, their short-term investment position would grow to $1.1 billion in 2017. However, in the next two years, their short-term investment position would fall back to $98 million in 2019. A positive note about the company’s trend is that they actually do have some short-term investments. However, in the last three years, 3M has consistently reduced its short-term investment position. Because of this, investors should expect short-term investments to go the way of the dodo bird in the next few years. In other words, the revenues don’t start growing, short-term investments may not be part of future balance sheets.
3M Summary Balance Sheet - 2019
|Short Term Investment||98||380||1,076||280||118|
|LT Debt - Current||2,795||1,211||1,853||972||2,044|
|Total Current Liabilities||9,222||7,244||7,687||6,219||7,118|
|Total Equity & Liability||44,659||36,500||37,987||32,906||32,718|
Section 3: 3M Financial Ratios Analyzed from 2015 to 2019
For this section, I have chosen several different financial ratios to review for 3M from 2015 to 2019. In reviewing each of their financial ratios, I first start with defining the financial ratio. Next, I supply the financial formula for calculating the specific ratio. Finally, I offer a brief analysis of their important Financial ratios.
3M Current Ratio.
3M had a current ratio of 1.54 in 2015. In the next three years, ending 2018, his current ratio position would grow to 1.89. With 1.0 being the gold standard for current ratio, this shows that the organization has excessive funds in its current asset category. To mitigate this problem, the organization should invest in long-term projects or increase their dividend payout.
3M Total Asset Turnover.
3M had a total asset turnover in 2015 of .93. In the next five years, total asset turnover ending 2019 at .72. This indicates that the company has too many assets that are not generating or increasingly generating revenues for the company. To mitigate this problem, 3M executives may consider selling off fixed assets or better aligning labor needs with projected revenues.
3M Return on Assets.
3M had a 14.77% return on assets in 2015. The organization was able to increase the return on assets to 15.35 in 2016. However, in the next three years, the organization would continually fall in the return on assets and 2019 with 10.23%. To mitigate this issue, the organization needs to maintain or grow the revenues while divesting assets. Assets that may be sold could include buildings or fixed assets. Further, the company could even improve their return on assets by paying out more dividends.
3M Debt ratio.
3M had a debt ratio of 26.7% in 2015. In the next five years, the company would continually increase its debt ratio ending 2019 and 39.23%. As noted previously, 3M’s revenues have remained flat for the last five years. If the company’s revenues are remaining flat and they are continuously accumulating debt, not only is the organization shooting their perceived risk for solvency through the roof but they are also not making money on the funds borrowed. Not a great position for the company.
3M Liquidity Ratios 2019
|Net Working Capital||8,154||8,981|
3M Asset Utilization 2019
|Total Asset Turnover||0.72||0.90|
|Fixed Asset Turnover||3.44||3.75|
|Days Sales Outstanding||54.42||55.92|
|Accounts Receivable Turnover||6.71||6.53|
|Working Capital Turnover||3.94||3.65|
|Average Days Inventory||0.02||0.02|
|Average Days Payable||0.04||0.04|
3M Profitability Ratios
|Return on Assets||10.23%||14.65%|
|Return on Equity||45.13%||54.32%|
|Net Profit Margin||14.22%||16.33%|
|Gross Profit Margin||46.68%||49.09%|
|Operating Profit Margin||19.21%||22.00%|
|Basic Earning Power||13.82%||19.75%|
3M Long-term Debt 2019
|Times Interest Earned|