3M Beneish M Score

MMM
 Stock
  

USD 147.44  2.82  1.88%   

This module uses fundamental data of 3M to approximate the value of its Beneish M Score. 3M M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Additionally, see 3M Piotroski F Score and 3M Altman Z Score analysis.
  
3M Debt Current is relatively stable at the moment as compared to the past year. The company's current value of Debt Current is estimated at 1.63 Billion. Debt to Equity Ratio is expected to hike to 2.25 this year, although the value of Total Debt will most likely fall to nearly 16.6 B. 3M Inventory Turnover is relatively stable at the moment as compared to the past year. The company's current value of Inventory Turnover is estimated at 4.62. Accrued Expenses Turnover is expected to hike to 18.51 this year, although the value of Accounts Payable Turnover will most likely fall to 12.46.
At this time, it appears that 3M Company is an unlikely manipulator. The earnings manipulation may begin if 3M's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by 3M executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of 3M's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.32
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables1.04Focus
Asset Quality0.95Focus
Expense Coverage1.02Focus
Gross Margin Strengs1.13Focus
Accruals Factor1.02Focus
Depreciation Resistance1.04Focus
Net Sales Growth1.04Focus
Financial Leverage Condition0.96Focus

3M Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if 3M's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Revenues36.9 B35.4 B
Sufficiently Up
Increasing
Slightly volatile
Selling General and Administrative Expense7.6 B7.2 B
Notably Up
Increasing
Slightly volatile
Net Cash Flow from Operations7.7 B7.5 B
Fairly Up
Increasing
Slightly volatile
Depreciation Amortization and Accretion1.9 B1.9 B
Fairly Down
Increasing
Slightly volatile
Total Assets46.3 B47.1 B
Fairly Down
Increasing
Slightly volatile
Investments206.3 M201 M
Fairly Up
Decreasing
Slightly volatile
Investments Current206.3 M201 M
Fairly Up
Decreasing
Slightly volatile
Investments Non Current116.4 M113.4 M
Fairly Up
Decreasing
Slightly volatile
Property Plant and Equipment Net10.6 B10.3 B
Fairly Up
Increasing
Slightly volatile
Trade and Non Trade ReceivablesB4.7 B
Significantly Up
Increasing
Slightly volatile
Total Liabilities30.7 B32 B
Sufficiently Down
Increasing
Slightly volatile
Current Assets15.7 B15.4 B
Fairly Up
Increasing
Slightly volatile
Assets Non Current30.6 B31.7 B
Sufficiently Down
Increasing
Slightly volatile
Current Liabilities8.9 BB
Fairly Down
Increasing
Slightly volatile
Liabilities Non Current21.7 B22.9 B
Notably Down
Increasing
Slightly volatile
Total Debt16.6 B18.2 B
Significantly Down
Increasing
Slightly volatile
Debt Current1.6 B1.6 B
Sufficiently Up
Increasing
Slightly volatile
Debt Non Current15 B16.6 B
Moderately Down
Increasing
Slightly volatile
Operating Income7.9 B7.4 B
Notably Up
Increasing
Slightly volatile
Gross Margin0.530.468
Moderately Up
Increasing
Slightly volatile

3M Company Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between 3M's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards 3M in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find 3M's degree of accounting gimmicks and manipulations.

About 3M Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Operating Expenses

9.62 Billion

3M Operating Expenses is relatively stable at the moment as compared to the past year. The company's current value of Operating Expenses is estimated at 9.62 Billion

3M Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as 3M. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201720182019202020212022 (projected)
Revenues31.66 B32.77 B32.14 B32.18 B35.35 B36.85 B
Total Assets37.99 B36.5 B44.66 B47.34 B47.07 B46.33 B
Current Assets14.28 B13.71 B12.97 B14.98 B15.4 B15.74 B
Assets Non Current23.71 B22.79 B31.69 B32.36 B31.67 B30.6 B
Total Liabilities26.36 B26.65 B34.53 B34.41 B31.95 B30.67 B
Current Liabilities7.69 B7.24 B9.22 B7.95 B9.04 B8.94 B
Total Debt13.95 B14.62 B21.17 B19.66 B18.22 B16.64 B
Debt Current1.85 B1.21 B3.04 B1.06 B1.57 B1.63 B
Debt Non Current12.1 B13.41 B18.12 B18.6 B16.65 B15.01 B
Operating Income7.69 B7.21 B6.17 B7.16 B7.37 B7.88 B
Investments1.08 B380 M98 M404 M201 M206.29 M
Investments Current1.08 B380 M98 M404 M201 M206.29 M

3M ESG Sustainability

Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, 3M's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to 3M's managers, analysts, and investors.
Environment Score
Governance Score
Social Score

About 3M Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze 3M Company's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of 3M using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of 3M Company based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
3M Company operates as a diversified technology company worldwide. It offers its products through e-commerce and traditional wholesalers, retailers, jobbers, distributors, and dealers. 3M operates under Conglomerates classification in the United States and is traded on New York Stock Exchange. It employs 95000 people.

3M Investors Sentiment

The influence of 3M's investor sentiment on the probability of its price appreciation or decline could be a good factor in your decision-making process regarding taking a position in 3M. The overall investor sentiment generally increases the direction of a stock movement in a one-year investment horizon. However, the impact of investor sentiment on the entire stock markets does not have a solid backing from leading economists and market statisticians.
Investor biases related to 3M's public news can be used to forecast risks associated with investment in 3M. The trend in average sentiment can be used to explain how an investor holding 3M can time the market purely based on public headlines and social activities around 3M Company. Please note that most equiteis that are difficult to arbitrage are affected by market sentiment the most.
3M's market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for 3M's and other traded tickers. The bigger the bubble, the more accurate is the estimated score. Higher bars for a given day show more participation in the average 3M's news discussions. The higher the estimated score, the more favorable is the investor's outlook on 3M.

3M Implied Volatility

    
  57.41  
3M's implied volatility exposes the market's sentiment of 3M Company stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if 3M's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that 3M stock will not fluctuate a lot when 3M's options are near their expiration.
Some investors attempt to determine whether the market's mood is bullish or bearish by monitoring changes in market sentiment. Unlike more traditional methods such as technical analysis, investor sentiment usually refers to the aggregate attitude towards 3M in the overall investment community. So, suppose investors can accurately measure the market's sentiment. In that case, they can use it for their benefit. For example, some tools to gauge market sentiment could be utilized using contrarian indexes, 3M's short interest history, or implied volatility extrapolated from 3M options trading.

Becoming a Better Investor with Macroaxis

Macroaxis puts the power of mathematics on your side. We analyze your portfolios and positions such as 3M Company using complex mathematical models and algorithms, but make them easy to understand. There is no real person involved in your portfolio analysis. We perform a number of calculations to compute absolute and relative portfolio volatility, correlation between your assets, value at risk, expected return as well as over 100 different fundamental and technical indicators.

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Additionally, see 3M Piotroski F Score and 3M Altman Z Score analysis. Note that the 3M Company information on this page should be used as a complementary analysis to other 3M's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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When running 3M Company price analysis, check to measure 3M's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy 3M is operating at the current time. Most of 3M's value examination focuses on studying past and present price action to predict the probability of 3M's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move 3M's price. Additionally, you may evaluate how the addition of 3M to your portfolios can decrease your overall portfolio volatility.
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Is 3M's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of 3M. If investors know 3M will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about 3M listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
-0.95
Market Capitalization
86.3 B
Quarterly Revenue Growth YOY
-0.028
Return On Assets
0.0893
Return On Equity
0.29
The market value of 3M Company is measured differently than its book value, which is the value of 3M that is recorded on the company's balance sheet. Investors also form their own opinion of 3M's value that differs from its market value or its book value, called intrinsic value, which is 3M's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because 3M's market value can be influenced by many factors that don't directly affect 3M's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between 3M's value and its price as these two are different measures arrived at by different means. Investors typically determine 3M value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, 3M's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.