Comparative Analysis Laura Mcmillan

3M Summary: Balance Sheet

Assets (2016)

  • Current Assets: 35%
  • Total Inventories: 10.29%
  • Accounts Receivable: 13.35%
  • PPE: 25.88%
  • Goodwill: 27.86%

Liabilities and Equity (2016)

  • Current liabilities: 18.9%
  • Total liabilities: 68.75%
  • Long-term debt: 32.45%
  • Total Equity: 31.43%
  • Retained Earnings: 115.2%
  • Treasury Stock: -77.29%

3M Summary: Income Statement (2016)

  • Cost of Sales: 49.95%
  • Gross Profit: 50.05%
  • SGA: 20.30%
  • Operating Income: 23.99%
  • EBT: 23.42%
  • Net Income: 16.77%

Competitors: Assets

  • Current Assets: opposite GE and J&J (accounts receivable > cash and cash equivalents and marketable securities)
  • Greater allocated to inventory (10% compared to 6%)
  • Decline in current assets over past 3 years, in contrast to GE and J&J increase
  • Greater proportion to PPE (25.88% 3M in 2016, 11.27% J&J, and 13.83% GE)

Competitors: Liabilities and Equity

  • Similar 18%-22% current liabilities over past 3 years for all 3 companies
  • 3M higher long-term debt (32.45% in 2016) compared to J&J (15.89%) and GE (28.77%)
  • 3M and GE have double percentage allocated to post retirement and pension benefits (12%) than J&J (6.81%)
  • GE has largest amount allocated to total liabilities (77-79% over past 3 years), 3M in middle (57.89% to 68.75%), and J&J about 50%.
  • 3M's retained earnings is significantly higher (115%) than J&J (78.29%) and GE (38.21%)
  • 3M's treasury stock also greater than J&J (-22%) and GE (-20%) at -77.29% in 2016.

Competitors: Income Statement

  • Moderate cost of sales (50%) compared to J&J (30%) and GE (70%)
  • Moderate gross income (50%) compared to J&J (70%) and GE (30%)
  • 3M and J&J have similar operating income percentages (24% and 28%) with GE much lower (14%)
  • 3M and J&J higher net income than GE (15.96%, 23.01%, and 7.14% respectively)

3M Strengths

  • Prepaid pension and benefits
  • Retained earnings
  • Treasury Stock
  • Decrease Cost of Sales
  • Higher PPE

3M Weaknesses

  • Less liquid current assets: accounts receivable
  • smaller allocation to R&D
  • Liabilities increase and equity decrease-increase in debt leverage
  • Greater long-term debt

ROA and ROCE

ROA

  • larger return on assets
  • 15.88% in 2014, 14.70% in 2015, and 15.35% in 2016
  • J&J 11.71% and GE 2.42% in 2016
  • 3M steady increase, J&J decline, and GE huge loss in 2015 and then increase in 2016

ROCE

  • 3M larger return on capital expenditures
  • 28.26% in 2014, 26.96% in 2015, and 27.07% in 2016
  • J&J 17.54% and GE 6.29% in 2016
  • 3M steady increase, J&J decline, and GE steady increase

Credits:

Created with images by KJGarbutt - "Post-Its" • skenmy - "24/365 - Post-it notes" • Monikapp - "list sticky notes note" • Dean Hochman - "post-it notes" • adnovak - "cards notes stickers" • DavsCE - "post it colors pink" • topgold - "Storyboarding by Post-its" • JogiBaer2 - "Post-It"

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