3M Co (FRA:MMM) Beneish M-Score : -3.98 (As of Apr. 26, 2024)

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What is 3M Co Beneish M-Score?

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -3.98 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for 3M Co's Beneish M-Score or its related term are showing as below:

FRA:MMM' s Beneish M-Score Range Over the Past 10 Years
Min: -3.98 Med: -2.72 Max: -2.62
Current: -3.98

During the past 13 years, the highest Beneish M-Score of 3M Co was -2.62. The lowest was -3.98. And the median was -2.72.

3M Co Beneish M-Score Historical Data

The historical data trend for 3M Co's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

3M Co Beneish M-Score Chart

3M Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.65

-2.82

-2.62

-2.73

-3.98

3M Co Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Beneish M-Score	Get a 7-Day Free Trial															-2.73	-2.80	-3.62	-4.07	-3.98

Competitive Comparison of 3M Co's Beneish M-Score

For the Conglomerates subindustry, 3M Co's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

3M Co's Beneish M-Score Distribution in the Conglomerates Industry

For the Conglomerates industry and Industrials sector, 3M Co's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where 3M Co's Beneish M-Score falls into.

3M Co Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of 3M Co for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 1.0953

0.528 * 1.0081

0.404 * 1.0249

0.892 * 0.9307

0.115 * 0.9241

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 2.5453

4.679 * -0.271659

0.327 * 1.1008

-4.02

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was €4,460 Mil.
Revenue was 7347.921 + 7788.344 + 7683.975 + 7500.954 = €30,321 Mil.
Gross Profit was 3058.195 + 3496.884 + 3432.637 + 3192.412 = €13,180 Mil.
Total Current Assets was €15,020 Mil.
Total Assets was €46,382 Mil.
Property, Plant and Equipment(Net PPE) was €9,095 Mil.
Depreciation, Depletion and Amortization(DDA) was €1,843 Mil.
Selling, General, & Admin. Expense(SGA) was €19,842 Mil.
Total Current Liabilities was €14,027 Mil.
Long-Term Debt & Capital Lease Obligation was €12,546 Mil.
Net Income was 866.565 + -1944.275 + -6314.243 + 911.584 = €-6,480 Mil.
Non Operating Income was 0 + 33.732 + -59.995 + -48.568 = €-75 Mil.
Cash Flow from Operations was 1821.162 + 1789.67 + 1392.807 + 1190.85 = €6,194 Mil.

Total Receivables was €4,375 Mil.
Revenue was 7626.576 + 8705.19 + 8232.092 + 8016.732 = €32,581 Mil.
Gross Profit was 3298.336 + 3929.91 + 3414.114 + 3634.724 = €14,277 Mil.
Total Current Assets was €13,865 Mil.
Total Assets was €43,854 Mil.
Property, Plant and Equipment(Net PPE) was €9,447 Mil.
Depreciation, Depletion and Amortization(DDA) was €1,743 Mil.
Selling, General, & Admin. Expense(SGA) was €8,376 Mil.
Total Current Liabilities was €8,990 Mil.
Long-Term Debt & Capital Lease Obligation was €13,835 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total Receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI	=	(Receivables_t / Revenue_t)	/	(Receivables_t-1 / Revenue_t-1)
	=	(4460.288 / 30321.194)	/	(4375.44 / 32580.59)
	=	0.147101	/	0.134296
	=	1.0953

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI	=	GrossMargin_t-1	/	GrossMargin_t
	=	(GrossProfit_t-1 / Revenue_t-1)	/	(GrossProfit_t / Revenue_t)
	=	(14277.084 / 32580.59)	/	(13180.128 / 30321.194)
	=	0.438208	/	0.434684
	=	1.0081

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than Property, Plant and Equipment to Total Assets.

AQI	=	(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)	/	(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
	=	(1 - (15019.543 + 9094.806) / 46381.86)	/	(1 - (13865.472 + 9446.608) / 43853.52)
	=	0.480091	/	0.46841
	=	1.0249

4. SGI = Sales Growth Index

Ratio of Revenue in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI	=	Sales_t	/	Sales_t-1
	=	Revenue_t	/	Revenue_t-1
	=	30321.194	/	32580.59
	=	0.9307

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI	=	(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1))	/	(Depreciation_t / (Depreciaton_t + PPE_t))
	=	(1742.564 / (1742.564 + 9446.608))	/	(1843.395 / (1843.395 + 9094.806))
	=	0.155737	/	0.168528
	=	0.9241

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI	=	(SGA_t / Sales_t)	/	(SGA_t-1 /Sales_t-1)
	=	(19841.765 / 30321.194)	/	(8376.294 / 32580.59)
	=	0.654386	/	0.257095
	=	2.5453

7. LVGI = Leverage Index

The ratio of total debt to Total Assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase in leverage

LVGI	=	((LTD_t + CurrentLiabilities_t) / TotalAssets_t)	/	((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
	=	((12546.394 + 14027.349) / 46381.86)	/	((13835.264 + 8989.712) / 43853.52)
	=	0.572934	/	0.520482
	=	1.1008

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA	=	(IncomefromContinuingOperations_t	-	CashFlowsfromOperations_t)	/	TotalAssets_t
	=	(NetIncome_t - NonOperatingIncome_t	-	CashFlowsfromOperations_t)	/	TotalAssets_t
	=	(-6480.369 - -74.831	-	6194.489)	/	46381.86
	=	-0.271659

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

3M Co has a M-score of -4.02 suggests that the company is unlikely to be a manipulator.

3M Co Beneish M-Score Related Terms

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3M Co (FRA:MMM) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Conglomerates » 3M Co (FRA:MMM) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

MMM:USA MMM:Mexico 1MMM:Italy MMMd:UK MMM:Germany MMM:Chile MMM:Switzerland MMMC34:Brazil MMM:Austria MMM:Argentina

Address

3M Center, St. Paul, MN, USA, 55144

Website

https://www.3m.com

3M is a multinational conglomerate that has operated since 1902, when it was known as Minnesota Mining and Manufacturing. The company is well known for its research and development laboratory and it leverages its science and technology across multiple product categories. As of 2020, 3M is organized into four business segments: safety and industrial, transportation and electronics, healthcare, and consumer. Nearly 50% of the company's revenue comes from outside the Americas, with the safety and industrial segment constituting a plurality of net sales. Many of the company's 60,000-plus products touch and concern a variety of consumers and end markets.