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3M Co (NYSE:MMM) Altman Z-Score

: 3.86 (As of Today)
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Good Sign:

Altman Z-score of 3.86 is strong.

3M Co has a Altman Z-Score of 3.86, indicating it is in Safe Zones. This implies the Altman Z-Score is strong.

The zones of discrimination were as such:

When Altman Z-Score <= 1.8, it is in Distress Zones.
When Altman Z-Score >= 3, it is in Safe Zones.
When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.

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

MMM' s Altman Z-Score Range Over the Past 10 Years
Min: 3.86   Med: 5.47   Max: 7.13
Current: 3.86

During the past 13 years, 3M Co's highest Altman Z-Score was 7.13. The lowest was 3.86. And the median was 5.47.


3M Co Altman Z-Score Historical Data

The historical data trend for 3M Co's Altman Z-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
Altman Z-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 5.81 4.35 4.43 4.72 4.05

3M Co Quarterly Data
Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22
Altman Z-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 4.72 4.49 4.06 4.06 4.05

Competitive Comparison

For the Conglomerates subindustry, 3M Co's Altman Z-Score, along with its competitors' market caps and Altman Z-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 Altman Z-Score Distribution

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

* The bar in red indicates where 3M Co's Altman Z-Score falls in comparison to its industry or sector. The grey bar indicates the Altman Z-Score's extreme value range as defined by GuruFocus.



3M Co Altman Z-Score Calculation

Altman Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

3M Co's Altman Z-Score for today is calculated with this formula:

Z=1.2*X1+1.4*X2+3.3*X3+0.6*X4+1.0*X5
=1.2*0.1112+1.4*1.0322+3.3*0.1475+0.6*1.7603+1.0*0.7368
=3.86

* 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. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Dec. 2022:
Total Assets was $46,455 Mil.
Total Current Assets was $14,688 Mil.
Total Current Liabilities was $9,523 Mil.
Retained Earnings was $47,950 Mil.
Pre-Tax Income was 597 + 4132 + 60 + 1603 = $6,392 Mil.
Interest Expense was -115 + -106 + -128 + -113 = $-462 Mil.
Revenue was 8079 + 8619 + 8702 + 8829 = $34,229 Mil.
Market Cap (Today) was $55,776 Mil.
Total Liabilities was $31,685 Mil.

* Note that for stock reported semi-annually or annually, GuruFocus uses latest annual data as the TTM data.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(14688 - 9523)/46455
=0.1112

X2=Retained Earnings/Total Assets
=47950/46455
=1.0322

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(6392 - -462)/46455
=0.1475

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=55775.562/31685
=1.7603

X5=Revenue/Total Assets
=34229/46455
=0.7368

The zones of discrimination were as such:

Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones

3M Co has a Altman Z-Score of 3.86 indicating it is in Safe Zones.

Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.


3M Co  (NYSE:MMM) Altman Z-Score Explanation

X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.

X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.

X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.

X4, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firm's assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.

X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firm's assets.

Read more about Altman Z-Score and the original research.


Be Aware

Altman Z-Score does not apply to financial companies.


3M Co Altman Z-Score Related Terms

Thank you for viewing the detailed overview of 3M Co's Altman Z-Score provided by GuruFocus.com. Please click on the following links to see related term pages.


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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