Company Analysis: 3M Co
The objective of this paper is to perform the 5-year financial analysis of 3M Co. As part of this analysis, we relied on the comparative analysis between the major financial item in order to understand the rising trend and to track performance indicators. The conclusion is to unearth the overall performance of the firm over the period of 5 years from 2011 to 2015.
Beginning with the revenue figures, the company witnessed a modest compounded annual growth rate of 0.39% during the past five years. However, during 2015, the company witnessed first ever revenue growth decline of 4.86%, which aligned with an increasing proportion of cost of goods sold, resulted in the decline in the gross profit figures. The company attributes the decline in sales figure to the string US dollar position, which hampered the export volumes to non-US countries that account for two-third of total sales of the company.
On the profit side, accessing the situation through the operating income figures, we found that while until 2014, the company’s relentless focus on operational excellence ensured strong performance with consistent rise in the operating income from $6178 million to $7135 million, during 2015, tough economic conditions and inability to control operating costs, resulted in a decline in the operating income to $6946 million.
On the bottom line basis, the earning per share continues to rise from $6.05 per share in 2011 to $7.72 per share in 2015, however, during 2015, the increase was attributed to fall in number of shares outstanding while the net income figures decreased during the year.
Overall, 3M displayed a sustainable performance, however the year 2015 was unrewarding primarily because of poor economic conditions that hampered sales growth of the company. But, considering strong cash position and free cash flow generation over $100 million, we do conclude that 3M is a financially sound entity.
Income Statement:
Balance Sheet:
Cash Flow:
References
Balance Sheet: 3M Co. n.d. 3 July 2016 <http://financials.morningstar.com/balance-sheet/bs.html?t=MMM®ion=usa&culture=en-US>.
Cash Flow Statement: 3M. n.d. 3 July 2016 <http://financials.morningstar.com/cash-flow/cf.html?t=MMM®ion=usa&culture=en-US>.
Income Statement: 3M Co. n.d. 3 July 2016 <http://financials.morningstar.com/income-statement/is.html?t=MMM®ion=usa&culture=en-US>.
