3M Ratio analysis

Liquidity

Current Ratios: 1.70 (2013), 2.06 (2014), 1.54 (2015)

  • 2013-2014: short-term borrowing and current portion of long term debt dropped
  • 2015: changed method of classification of marketable securities (liabilities) from current to non-current (813 million)

Quick Ratios: 1.18 (2013), 1.44 (2014), 1.05 (2015)

Solvency

Debt-to-Equity: .87 (2013), 1.37 (2014), 1.79 (2015)

  • increase in treasury stock-> decrease in equity

Long-term Debt-to-Equity: .45 (2013), .92 (2014), 1.18 (2015)

  • Long-term debt increase
  • increase in pension and post-retirement benefits

Times Interest Earned: 64 (2013), 65.46 (2014), 56.47 (2015)

  • Increase in interest expense between 2014 and 2015 (109 to 123 million)

Financial Leverage

Debt-to-Total Assets: .465 (2013), .579 (2014), .641 (2015)

  • assets remain about same, debts increased (long-term liabilities)

Debt-to-Equity: Above

  • Risky
  • Competitor Johnson & Johnson avg. .19 debt to total assets 2015

Asset Efficiency

Fixed Asset Turnover: 3.568 (2013), 3.749 (2014), 3.555 (2015)

  • " PPE are recorded at cost and depreciation is calculated using straight-line method" (notes).

Total Asset Turnover: .92 (2013), 1.02 (2014), .93 (2015)

  • Johnson & Johnson: avg. .56

Inventory Turnover: 17.25 (2013), 18.47 (2014), 18.29 (2015)

Accounts Receivable Turnover: 7.43(2013), 7.50 (2014), 7.22 (2015)

  • decrease in bad debt allowance - 104 (2013) to 91 (2015)

Profitability

Gross Margin: 47.83% (2013), 48.31% (2014), 49.19% (2015)

  • consistent sales and cogs
  • J&J has higher gross profit margin, but is decreasing

Operating Margin: 21.59% (2013), 22.42% (2014), 22.94% (2015)

Net Profit Margin: 15.09% (2013), 15.57% (2014), 15.96% (2015)

Return on Assets (ROA): 13.89% (2013), 15.88% (2014), 14.77% (2015)

Return on Equity (ROE): 25.96% (2013), 37.71% (2014), 41.14% (2015)

Market Value

Earnings Per Share (EPS): 6.83 (2013), 7.63 (2014), 7.72 (2015)

  • decrease in shares outstanding of 50 million between 2013 and 2014 and 25 million between 2014 and 2015
  • J&J: 4.81 (2013) and 5.7 (2015)

Price Earnings: 20.53 (2013), 21.52 (2014), 19.5 (2015)

  • market share 140.25 in 2013, 164.32 in 2014, and 150.64 in 2015

Credits:

Created with images by Monikapp - "list sticky notes note" • Dean Hochman - "post-it notes" • adnovak - "cards notes stickers" • Dean Hochman - "post-it notes" • Pexels - "post it notes sticky notes note" • topgold - "Storyboarding by Post-its"

Made with Adobe Slate

Make your words and images move.

Get Slate

Report Abuse

If you feel that this video content violates the Adobe Terms of Use, you may report this content by filling out this quick form.

To report a Copyright Violation, please follow Section 17 in the Terms of Use.