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3M Co (NYSE:MMM) Beneish M-Score

: -2.78 (As of Today)
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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 -2.78 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:

MMM' s Beneish M-Score Range Over the Past 10 Years
Min: -3.17   Med: -2.67   Max: -2.03
Current: -2.78

During the past 13 years, the highest Beneish M-Score of 3M Co was -2.03. The lowest was -3.17. And the median was -2.67.


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 Annual Data
Trend Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22
Beneish M-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.72 -2.65 -2.82 -2.62 -2.72

3M Co Quarterly Data
Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.57 -2.67 -2.68 -2.72 -2.78

Competitive Comparison

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 Beneish M-Score Distribution

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 in comparison to its industry or sector. The grey bar indicates the Beneish M-Score's extreme value range as defined by GuruFocus.



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:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.018+0.528 * 1.066+0.404 * 1.0078+0.892 * 0.9462+0.115 * 1.0242
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3149+4.679 * -0.058333-0.327 * 0.9609
=-2.78

* 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.

This Year (Mar23) TTM:Last Year (Mar22) TTM:
Total Receivables was $4,638 Mil.
Revenue was 8031 + 8079 + 8619 + 8702 = $33,431 Mil.
Gross Profit was 3418 + 3494 + 3891 + 3609 = $14,412 Mil.
Total Current Assets was $14,963 Mil.
Total Assets was $46,886 Mil.
Property, Plant and Equipment(Net PPE) was $10,130 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,838 Mil.
Selling, General, & Admin. Expense(SGA) was $8,593 Mil.
Total Current Liabilities was $10,556 Mil.
Long-Term Debt & Capital Lease Obligation was $13,575 Mil.
Net Income was 976 + 541 + 3859 + 78 = $5,454 Mil.
Non Operating Income was -52 + -470 + 2789 + 67 = $2,334 Mil.
Cash Flow from Operations was 1275 + 1922 + 1531 + 1127 = $5,855 Mil.
Total Receivables was $4,815 Mil.
Revenue was 8829 + 8612 + 8942 + 8950 = $35,333 Mil.
Gross Profit was 4003 + 3914 + 4089 + 4231 = $16,237 Mil.
Total Current Assets was $14,452 Mil.
Total Assets was $45,855 Mil.
Property, Plant and Equipment(Net PPE) was $10,254 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,914 Mil.
Selling, General, & Admin. Expense(SGA) was $6,907 Mil.
Total Current Liabilities was $9,152 Mil.
Long-Term Debt & Capital Lease Obligation was $15,409 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)
=(4638 / 33431) / (4815 / 35333)
=0.138734 / 0.136275
=1.018

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)
=(16237 / 35333) / (14412 / 33431)
=0.459542 / 0.431097
=1.066

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 - (14963 + 10130) / 46886) / (1 - (14452 + 10254) / 45855)
=0.464808 / 0.461215
=1.0078

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
=33431 / 35333
=0.9462

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))
=(1914 / (1914 + 10254)) / (1838 / (1838 + 10130))
=0.157298 / 0.153576
=1.0242

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)
=(8593 / 33431) / (6907 / 35333)
=0.257037 / 0.195483
=1.3149

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)
=((13575 + 10556) / 46886) / ((15409 + 9152) / 45855)
=0.514674 / 0.535623
=0.9609

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
=(5454 - 2334 - 5855) / 46886
=-0.058333

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 -2.78 suggests that the company is unlikely to be a manipulator.


3M Co (NYSE:MMM) Business Description

3M Co logo
Address
3M Center, St. Paul, MN, USA, 55144
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.
Executives
Suzan Kereere director 255 FISERV DRIVE, BROOKFIELD WI 53045
Kevin H Rhodes officer: EVP & Chief Legal Officer 3M COMPANY, 3M CENTER, BLDG 220-09-E-02, ST. PAUL MN 55144-1000
Peter D Gibbons officer: Group President 2401 UTAH AVENUE SOUTH, SUITE 800, SEATTLE WA 98134
Chavez Rodriguez Beatriz Karina officer: Senior Vice President 3M COMPANY, 3M CENTER BLDG 220-09-E-02, ST. PAUL MN 55144-1000
Mark W. Murphy officer: Executive Vice President ONE ST. JUDE MEDICAL DRIVE, ST. PAUL MN 55117
Zoe L Dickson officer: Executive Vice President 3M COMPANY, 3M CENTER, BLDG 220 09 E-02, ST. PAUL MN 55144-1000
James R Fitterling director 2211 H.H. DOW WAY, MIDLAND MI 48674
Jeffrey R Lavers officer: Executive Vice President 3M COMPANY, 3M CENTER, BLDG 220 09 E-02, ST. PAUL MN 55144-1000
Veena M Lakkundi officer: Senior Vice President 3M COMPANY, 3M CENTER, BLDG 220 09 E-02, ST. PAUL MN 55144-1000
Monish D Patolawala officer: Senior VP and CFO 3M COMPANY, 3M CENTER, BLDG 220 09 E-02, ST. PAUL MN 55144-1000
Vinita Lee Piper other: IVM001 712 WILCREST, SUITE 3020, HOUSTON TX 77042
Pamela Craig director C/O ACCENTURE, 161 N CLARK STREET, CHICAGO IL 60601
Ty R Silberhorn officer: Senior Vice President 3M COMPANY OFFICE OF GENERAL COUNSEL, 3M CENTER, ST PAUL MN 55144-1000
Theresa E Reinseth officer: Vice President/CAO 3M COMPANY OFFICE OF GENERAL COUNSEL, 3M CENTER, ST PAUL MN 55144-1000
Denise R Rutherford officer: Senior Vice President 3M COMPANY OFFICE OF GENERAL COUNSEL, 3M CENTER, ST PAUL MN 55144-1000

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