Mmm Company Evaluation
Essay by lhodge123 • September 30, 2015 • Research Paper • 899 Words (4 Pages) • 1,192 Views
Lewis Hodge
Corporate Finance
Company analysis
May 8, 2015
3M Company (MMM) analysis
Financial Statements
The motive of this paper is to carry out a precise financial analysis on3M Company. Firstly, three important financial statements for this company will be highlighted. These statements are the income statement, balance sheet, and the statement of cash flow. These statements are attached in Microsoft excel.
Ratio Analysis
Following this, a number of ratios were computed in order to show specific trends in 3M Company. This included ratios that measured short term solvency or liquidity, long-term solvency, asset management or turnover ratios, and profitability. Along with the attached ratios, a table below will illustrate the market value ratios.
Sony Market Value Ratios
2012 | 2013 | 2014 | |
Price to Earnings | 14.71 | 20.87 | 21.93 |
Peg ratio | 2.47 | 3.24 | 1.91 |
Price/Sales | 3.29 | 2.53 | 3.16 |
Market/book | 7.20 | 4.12 | 5.27 |
Tobin's Q | 1.81 | 2.75 | 3.37 |
Enterprise Value - EBTDA | 12.13 | 9.74 | 11.79 |
General Electric Market Value Ratios
2012 | 2013 | 2014 | |
Price to Earnings | 15.96 | 16.82 | 21.38 |
Peg ratio | 7.63 | 1.56 | 3.74 |
Price/Sales | 1.46 | 1.62 | 1.85 |
Market/book | 1.71 | 1.89 | 1.99 |
Tobin's Q | .34 | .41 | .35 |
Enterprise Value - EBTDA | 11.94 | 11.64 | 13.34 |
According to this evaluation of these ratios it can be stated that 3M Company is fairly valued. When compared to General Electric which is a major competitor their ratios are close in proximity. However, in terms of the Price to sales and Market to book ratios, 3M Company has the higher ratios. All the other ratios are very close in proximity which indicates that 3M Company is fairly valued in relation to one of its top industry competitors.
Comparison Graphs
Next, graphs will be illustrated with the intensions of highlighting trends and making comparisons between particular industry ratios and also the ratios calculated in Microsoft excel. These graphs will assist in providing clarity on the position of 3M in relation to its competitors and the industry.
CURRENT RATIO COMPARISON
[pic 1]
3M Company has a lower current ratio than general electric who is one of its major competitors. This highlights that 3M Company is less capable of repaying its short term debts than General Electric.[1]
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