3M Company

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3M Company Financial Analysis
In undertaking a study of a company, it becomes necessary to have a financial analysis. Such an analysis is essential because it offers the right ground to determine the standing point of the group in as far as finances are concerned. In this paper, there is a financial analysis of the 3M Company. In the analysis, there is much delving on the assets and liabilities of the company. Assets represent the positive aspect of the finances of the enterprise while liabilities tilt to the downside as there is a cash flow outside firm. There is the utilization of peer-reviewed articles on 3M Company in a bid to get much insight into the financial stands.
In an attempt to understand the position of the 3M Company in matters of finance, it is essential to consider key aspects of the cash flow. In the last quarter, there has been an operating income margin of 24.7 %. This figure presents a 0.4 percentage up the previous year. It is essential to note that the margins get the contribution from each of the different business groups in the 3M company, with each posting not less than 22% margin. These margins emanate from the increasing cash flow.
There has been a cash flow increase of 19%. When there is an increase in the free cash flow, there is bound to be a long term positive outcome of finances or simply, high profitability in the future, (Diakantonis, 25). However, this view is by other factors being held constant. The increase in the free cash flow has led to the attainment of 1.

9 billion US $.There is also a 1.4 billion US $return to the shareholders through dividends as well as the Gross share purchases.
Assets
The assets in this presentation are by the figures as at the end of the year 2015.
Category Amount in a million the US $
Cash and cash equivalents 1,798
Current marketable security 118
Accounts receivables and net allowances 4,154
inventories 3,518
Prepaid expenses and other 1,081
Derivative assets, current 211
Insurance receivables and other related 106
There is an observation of different figures regarding the assets. The most captivating aspect is that; there are high numbers of the most reliable categories. For instance, the cash and the similar group go to almost 2,000 million US $. This aspect is very much captivating because there is average reliance on cash and equivalents for large companies. Nevertheless, the confidence does not overshadow the need for the other categories, but when there are high levels of cash and equivalents, there is much promise in a firm.
For the most reliable types, there is the realization that there are significantly high figures. For instance, inventories and accounts receivables the figure are as high as 3.5 million US $ and 4.1 respectively. Having the stocks greater than the cash and equivalents is paramount for a company of the magnitude of 3M because there is a need to have an indirect flow of money and reservoirs for future. This idea is as opposed to the accumulation of cash, an idea much associated with the small scale enterprises.
Current assets
Category Amount in a million the US $
Marketable securities, on-current 9
Equity method 56
Cost method 59
Other investment 2
Investments
Category Amount in a million the US $
Property, plant, and equivalent 8,515
Goodwill 9,249
Intangible assets-net 2,601
Prepaid pension benefits 188
Deferred income taxes 510
There is the realization that the investments are way up, even in comparison with the current assess. This aspect is highly laudable when it comes to the handling of the financial aspect of a large firm like the 3M. The investment forms the most crucial part of the financial stability of a firm. This idea emanates from considerations that investments are not much subject to the threats such as those of fluctuations such as is the case with cash and other inventories. There is also an added advantage in investments, in a sense that; there are high likelihoods of appreciation hence, increasing the stability of the firm’s finances further.
Liabilities
In the undertaking financial analysis, failure to include the liabilities side would yield into an unreliable presentation. These views emanate from the realizations that; without a consideration of the liabilities, there would be a skewed view of the financial stance of a firm. Liabilities represent the out flow of the finances in a company.
Category Amount in a million the US $
Short-term borrowings 2,044
Accounts payable 1,694
Accrued pay roll 644
Accrued income taxes 332
Accrued trade payables 566
Deferred income 518
Derivative liabilities 65
It is not easy to exhaust the liabilities in a large company as the 3M. However, the above aspects portray a presentation of the liabilities in the enterprise. The essential thing in the financial deliberations is just to have the liabilities lower than the assets, (Abuaf, 56). As long as there is the attainment of such heights, management could rest assured that there is the right track in matters of the finances. There is the observation that the liabilities at 3M are way below the assets and therefore, the conclusion that 3M is on the right track in the financial analysis.
Works Cited
Abuaf, Niso. “The Macroeconomic Outlook And Liability Management Strategies.” Journal Of Applied Finance 23.2 (2013): 52-60. Business Source Complete. Web. 21 Nov. 2016.
Diakantonis, Demitri. “Shrink to grow. (Cover Story).” Mergers & Acquisitions: The Dealermaker’s Journal 51.7 (2016): 18-29. Business Source Complete. Web. 21 Nov. 2016.