3M: Minnesota Mining and manufacturing ompany - Essay Example

? 3M: Minnesota Mining and manufacturing Company College 11/6 3M: Minnesota Mining and manufacturing Company ? Introduction 3M Company, formerly known as the Minnesota Mining and Manufacturing Company, is an American multinational conglomerate corporation based in Maplewood, Minnesota, a suburb of St. Paul. USA. With over 80,000 employees, they produce over 55,000 products, including: adhesives, abrasives, laminates, passive fire protection, dental products, electronic materials, medical products, car care products (such as sun films, polish, wax, car shampoo, treatment for the exterior, interior and the under chassis rust protection), electronic circuits and optical films. 3M has operations in more than 60 countries – 29 international companies with manufacturing operations, and 35 with laboratories. 3M products are available for purchase through distributors and retailers in more than 200 countries, and many 3M products are available online directly from the company. Minnesota Mining & Manufacturing Company (3M) was founded in 1902 by a group of industrialists led by Lucius P. Ordway and John Ober. The company was formed to exploit the mineral corundum; however, three years later the company had nothing to show but a pile of rock, as the corundum they hoped for was actually anorthosite. The company was able to use the anorthosite to make sandpaper, which had a large and expanding market. While 3M did not turn a profit for several more years, two of the employees it hired in 1907 would ensure its future. The two employees were William L. McKnight and A.G. Bush, who developed the sales system that helped to make the company a success. The two men designed an aggressive, customer-oriented brand of salesmanship. I selected this company for analysis because over a period of decades the company has indicated growth and firm market standing through diversification, avoiding price cuts, increasing sales by 10-15 percent a year, high employee morale, and quality control. 3M is a diversified technology company serving customers and communities with innovative products and services. Each of their six businesses has earned leading global market positions. 3M captures the spark of new ideas and transforms them into thousands of ingenious products. Their culture of creative collaboration inspires a never-ending stream of powerful technologies that make life better. 3M is the innovation company that never stops inventing. Analysis of the Business Environments Fol are the stated business conduct policies of the company:- 1. Act with uncompromising honesty and integrity in everything they do. 2. Satisfy their customers with innovative technology and superior quality, value and service. 3. Provide their investors an attractive return through sustainable, global growth. 4. Respect their social and physical environment around the world. 5. Value and develop their employees' diverse talents, initiative and leadership 6. Earn the admiration of all those associated with 3M worldwide. The 3M Business Conduct Committee, consisting of several senior executives and chaired by 3M’s Vice President, Compliance and Business Conduct, has responsibility for overseeing 3M’s legal and ethical compliance program. The Business Conduct Committee reports to the Audit Committee of the 3M Board of Directors, which assists the Board of Directors in oversight of 3M’s legal and regulatory compliance program. The Compliance and Business Conduct Department oversees the strategic, systematic and operational components of 3M’s compliance program design and implementation. The Department also focuses on implementing the initiatives of the Business Conduct Committee in such areas as compliance policy drafting, compliance risk analysis, education, communication strategy and program awareness, coordination of investigations and continuous process improvement. The Compliance and Business Conduct Department is assisted by dedicated compliance organizations in the areas of government contracting, health care regulatory, and environmental health and safety. In addition, 3M utilizes a network of part-time Compliance Contacts in every business unit and staff group who assist the Compliance and Business Conduct Department in ensuring that their organizations continuously demonstrate legal compliance and ethical business conduct. Compliance Contacts assist in business conduct policy training, communications and completing periodic risk assessments for their organizations. Upholding 3M’s Business Conduct Policies and values is the responsibility of everyone acting on 3M’s behalf. It is also everyone’s responsibility to raise a concern promptly about a possible violation of 3M policy or law. It is vital to address problems early while they are small and more easily fixed. Serious damage, fines, penalties and loss of confidence in 3M can result if small problems are allowed to grow into big ones. 3M vigorously affirms its commitment to sustainable development through environmental protection, social responsibility and economic progress. 3M recognizes that the company’s long-term success springs from adopting and implementing the principles of sustainable development: stewardship to the environment, contributions to society, and to the creation of economic value and worth. At the same time, they recognize that only by continuing to be a viable and successful enterprise can they continue to be a positive contributor to sustainable development. Company Founder and Vision. 3M has institutionalized a corporate culture that promotes entrepreneurship. Early in 3M's history, chair and CEO William L. McKnight, long considered to be the company's "spiritual founder," introduced policies and philosophies that were considered to be responsible for 3M's ability to innovate consistently – seed capital, 15 percent option, dual-ladder career path, etc. Current management has continued to embrace and expand these policies and philosophies, believing innovation to be the cornerstone of 3M's future success.3M's vision is to contribute to society's move to sustainable development. To 3M, sustainable development means meeting the needs of customers today, while respecting the ability of future generations to meet their needs. 3M's process for moving toward sustainability is called eco-efficiency - first defined by the World Business Council for Sustainable Development. This means producing more products and services with fewer resources and less environmental, health and safety impact. (Vision) Empowerment . William L. McKnight, who served as 3M chairman of the board from 1949 to 1966, encouraged 3M management to "delegate responsibility and encourage men and women to exercise their initiative." .While his management theories are the guiding principles for 3M, it's this very empowerment that has allowed 3M employees past, present and future to relentlessly ask "what if," and explore the limitless possibilities of sustainability. Few examples are as under:- 1. Health and Productivity: Health and productivity score cards have been introduced in U.S. 3M plants. 3M continues to work to reduce preventable health care incidences and optimize productivity worldwide. 2. Performance-Based Compensation: 3M employee awards are closely linked to the company’s growth through employee performance and competitive compensation processes. By linking performance and pay, they are better able to nurture and reward accelerated performance and build on their status as an employer of choice. This, in turn, drives innovation and continues global strength and success. 3. Leadership Development: 3M’s Leadership Development Institute includes the 3M Accelerated Leadership Development Program, an intense three-week accelerated development experience for some of their most promising leaders. Participants experience real-life learning by working on 3M business issues and presenting recommendations to senior management. 4. Career Opportunity: 3M’s reputation as an industry leader and their culture of innovation continue to help them attract and retain quality employees around the globe who value the 3M career opportunity. 5. Equal Opportunity and Diversity: 3M considers a diverse work force to be essential to the overall success of their company as well as an important social commitment. Diversity at 3M is defined as: respecting their differences; maximizing their individual potential; valuing their uniqueness; and synergizing their collective talents and experiences for the growth and success of 3M. As a global company, 3M works with diverse customers in diverse markets. The diversity of 3M’s global workforce is an indispensable asset and is key to global success. 6. Employment of 75,333 people in more than 60 countries is mostly native.3M employs mostly local nationals. In 2006, 320 or 0.4 percent of 3M employees worldwide were foreign service employees not residing in their home countries. Ethical Behavior and Social Responsibility. The foundation of 3M’s business conduct program is this: “we will do business legally and ethically in all aspects of their global operations”. As a Policy Statement: 3M is recognized worldwide as an ethical and law-abiding company. Although the company has business operations in more than 60 countries, 3M has only one set of business conduct policies that apply globally. These universal standards provide a framework for conducting business the right way – legally and ethically – everywhere 3M does business. It is 3M policy that employees and others acting on 3M’s behalf must comply with all laws and 3M Business Conduct Policies. Employees also are expected to help company management promptly address suspected violations by bringing the concerns to the attention of management or using the reporting options available at 3M-Ethics.com. Supervisors and managers are expected to escalate suspected violations that come to their attention by centrally reporting them in accordance with company policy. As a global company, 3M is regulated by many different country, state and local laws simultaneously. In addition to complying with 3M’s Business Conduct Policies related to 3M business activities, employees must abide by all laws that apply to them wherever they live or work. Ethical Operations: Sustaining 3M’s future includes acting in a socially responsible way toward potential, current and former employees. As an ethical and law-abiding company, 3M complies with government regulations around the world concerning human rights, employees and employment laws and expects ethical behavior from employees in accordance with their global Business Conduct Manual. 3M’s conduct goes beyond obligation to include policies that help support a challenging, productive and enjoyable work culture. 1. Supplier Management .3M has a formal process as part of its Sourcing Policy that sets standards for its suppliers in the areas of environmental, health and safety, transportation, and labor and human resources. The standards apply to the selection and retention of all suppliers that provide goods or services to 3M worldwide and establish a framework that 3M considers important to a safe and healthy workplace, to the maintenance of fair and reasonable labor and human resources, practices, and to the management of manufacturing and distribution operations to minimize adverse impact to the environment. 2. Stakeholder Engagement. 3M strives to maintain a continuous and open dialogue with the community, shareholders, employees, retirees and other interested parties about the environmental, social and economic issues related to their operations including past achievements and future sustainability goals. 3M partners with a variety of organizations to help provide the company with a diverse set of viewpoints on sustainability, a better understanding of the positions of their stakeholders, and a mechanism to learn from the successes and failures of their peers. 3. Community Giving. Because of 3M’s business success, they are able to invest in innovative community programs that help make the future brighter for everyone. Community giving is an important part of 3M’s sustainability strategy. 3M’s philanthropy combines 3M and 3M Foundation cash gifts, donated products and volunteerism by employees and retirees. Their global Community Giving Program is decentralized with 3M subsidiaries in each country developing and administering a program that is consistent with the local culture, community needs and environment in which we operate. In the United States, 3M and the 3M Foundation donated more than $37 million through its community giving programs. Summary of Products and/or Services. 3M has a worldwide presence in the following markets: 1. Consumer and Office 2. Display and Graphics 3. Electro and Communications 4. Health Care 5. Industrial and Transportation 6. Safety, Security and Protection Services 7. 3M High Visibility Signals: a line of traffic signal devices, with the flagship being the Model 131 12" vehicle signal head. Produced from 1969–2007 8. ACCR 9. Aearo 10. Avagard Hygiene Range 11. Bondo 12. Cavilon 13. Chrome & Metal Polish 14. Clarity 15. Coban 16. Command Adhesive 17. Comply Steam Indicators 18. 3M Purification 19. DI-NOC 20. Durapore 21. Dobie 22. Dynatel 23. FastBond Adhesives 24. Filtrete 25. Fluorinert 26. Gold Privacy Filter 27. Hookit sandpaper 28. Imiquimod 29. Littmann Stethoscopes 30. Littmann Model 3200 Electronic Stethoscope with Zargis Cardioscan 31. Medipore 32. Micropore Hypoallergenic Skin Tape 33. Microfoam 34. Natural View protection film 35. Nexcare 36. O-Cel-O 37. Post-it note 38. Reddot ECK Electrodes 39. Reston 40. SandBlaster 41. Scotch Tape 42. Scotch Magic Tape 43. Scientific Anglers 44. Scotch-Brand Masking Tape 45. Scotch-Brite 46. Scotchcal Film 47. Scotchgard 48. Scotchlite 49. Scotchcast Fibreglass casting 50. Scotchprint Graphics 51. Scotch-Weld Adhesives 52. Steridrape 53. Steristrip 54. Stikit sandpaper 55. Super 77 Classic Spray Adhesive 56. Tartan 57. Tegaderm 58. Thinsulate 59. Velostat[29] 60. VHB 61. Vikuiti 62. Wetordry sandpaper 63. Microtouch Touch Screens 3M Brand Identity Vision 3M earn customer loyalty and respect when they effectively differentiate from their competition and leverage the 3M brand identity standards as a vehicle for impact and success. As a diversified technology company, they rely on the delivery of their brand promise (what they bring to the marketplace), along with the expression of their brand essence (how 3M is able to achieve that brand promise) to ensure understanding and connection with their company, brands and products. 3M Brand Promise is Practical and ingenious solutions that help customers succeed. 3M Brand Essence is Harnessing the chain reaction of new ideas. The integration of these core building blocks reinforces the trust, leadership, quality and innovation for which 3M has grown to be recognized and respected. In addition, they also have their strategic brands, which provide further relevance and differentiation in key market categories. 3M Brand Identity Objectives The objectives of their brand identity system are to: 1. Consistently express, the 3M brand — their promise, personality and values. 2. Manage the value of the 3M brand and strategic brands to instill familiarity, reinforce brand/product experience and protect their equity. 3. Provide tools to facilitate consistent delivery of the brand promise with every point of contact. 3M Brand Identity Strategies To build a truly global brand, they need to maximize awareness of their single, unifying 3M brand. To achieve this, their strategies are to: 1. Increase familiarity of the 3M brand identity through consistent application of their identity standards worldwide. 2. Build equity in identity assets that are globally recognized. 3. Build market leadership in every market they serve. Marketing Plan . 3M is a $17 billion diversified technology company with leading positions in electronics, telecommunications, industrial, consumer and office, health care, safety and other markets. 3M's growth has come through a desire to participate in many markets where the company can make a significant contribution from core technologies, rather than be dominant in just a few markets. Headquartered in St. Paul, Minnesota, the company has operations in more than 60 countries and serves customers in nearly 200 countries. International operations account for more than half of 3M's business and remain among its greatest opportunities for growth. 3M businesses share technologies, manufacturing operations, brands, marketing channels and other important resources. Work continues on several corporate initiatives, including reducing waste and pollution; improving productivity; reducing costs; and developing products more quickly and efficiently. Virtually all business plans are written as a list of bullet points. Despite the skill or knowledge of their authors, these plans usually aren't anything more than lists of "good things to do." For example: Increase sales by 10%. Reduce distribution costs by 5%. Develop a synergistic vision for traditional products. Rarely do these lists reflect deep thought or inspire commitment. Worse, they do not specify critical relationships between the points, and they can't demonstrate how the goals will be achieved. 3M executive Gordon Shaw began looking for a more coherent and compelling way to present business plans. He found it in the form of strategic stories. Telling stories was already a habit of mind at 3M. Stories about the advent of Post-it Notes and the invention of masking tape help define 3M's identity. They are part of the way people at 3M explain themselves to their customers and to one another. Shaw and his coauthors examine how business plans can be transformed into strategic narratives. By painting a picture of the market, the competition, and the strategy needed to beat the competition, these narratives can fill in the spaces around the bullet points for those who will approve and those who will implement the strategy. When people can locate themselves in the story, their sense of commitment and involvement is enhanced. By conveying a powerful impression of the process of winning, narrative plans can mobilize an entire organization. Industry. 3M has a worldwide presence in the following markets: 1. Consumer and Office 2. Display and Graphics 3. Electro and Communications 4. Health Care 5. Industrial and Transportation 6. Safety, Security and Protection Services Differentiation of Products/Services. Since 3M operates in six different business sectors, it faces various smaller, more specialized companies in singular areas and a few larger companies cross sector, such as Tyco International (TYC). Industry & Transportation, Healthcare, and Display & Graphics, are the three greatest contributors to sales for 3M. Since 2004, as 3M experienced increased competition in its Brightness Enhancement Films area, organic growth and margins for the segment have come under more pressure. Its Dual Brightness Enhancement Films technology faces less pressure from competitors, but operating margins may decrease as a result of pressure on LCD screen manufactures to cut costs as the LCD industry becomes highly competitive. 3M is a diversified manufacturer with one of the highest international presences of any multi-industry company. With products such as Post-It Notes and Scotch Tape as well as high-tech LCD films, 3M develops innovative new products while turning a profit off of old favorites. 3M operates in six business segments: Healthcare, Industrial & Transportation, Consumer & Office, Display & Graphics (D&G), Electro & Communications, and Safety, Security & Protection. 3M is becoming increasingly global: 63% of 3M's total revenue comes from outside the United States as of 2009. Its international penetration makes 3M well positioned to take advantage of growing economies such as those of India and China, China, and Brazil. 3M has stepped up acquisitions of smaller international companies to spur overseas and portfolio expansion from 2008 to present. The company purchased Aearo Holding Corp, Cogent, and many other firms to enhance its product offering during this time period totaling approximately $1 billion in acquisitions. The company is looking to buy products and brands that are well-known in their domestic markets in order to accelerate penetration of foreign markets. How 3M is different from its competitors 3M World wide believes in the philosophy of innovation. They have a diversified portfolio of approximately 65,000 products.  3M have more than 40 core technologies, six market leading businesses, operations in more than 60 countries and presence in 200 plus countries. They provide borderless customer success; have 13 research and development centers across the globe. Every day, 3M people find ways to make life better and easier for people around the world. They serve their customers through seven business segments, which increase speed and efficiency by sharing technology.  Each of their business produces innovative products, holding leading global market positions. They believe in the dictum “If we can’t save your money we don’t deserve your business”. Product/Service Delivery & Distribution 3M sells a wide range of products to a diversified base of customers around the world and has no material concentration of credit risk. Revenue is recognized when the risks and rewards of ownership have substantively transferred to customers. This condition normally is met when the product has been delivered or upon performance of services. 3M records estimated reductions to revenue or records expense for customer and distributor incentives, primarily comprised of rebates and free goods, at the time of the initial sale. These sales incentives are accounted for in accordance with ASC 605, Revenue Recognition. The estimated reductions of revenue for rebates are based on the sales terms, historical experience, trend analysis and projected market conditions in the various markets served. Since 3M serves numerous markets, the rebate programs offered vary across businesses, but the most common incentive relates to amounts paid or credited to customers for achieving defined volume levels or growth objectives. Free goods are accounted for as an expense and recorded in cost of sales. Sales, use, value-added and other excise taxes are not recognized in revenue. The majority of 3M’s sales agreements are for standard products and services with customer acceptance occurring upon delivery of the product or performance of the service. 3M also enters into agreements that contain multiple elements (such as equipment, installation and service) or non-standard terms and conditions. For multiple-element arrangements, 3M recognizes revenue for delivered elements when it has stand-alone value to the customer, the fair values of undelivered elements are known, customer acceptance of the delivered elements has occurred, and there are only customary refund or return rights related to the delivered elements. In addition to the preceding conditions, equipment revenue is not recorded until the installation has been completed if equipment acceptance is dependent upon installation, or if installation is essential to the functionality of the equipment. Installation revenues are not recorded until installation has been completed. For prepaid service contracts, sales revenue is recognized on a straight-line basis over the term of the contract, unless historical evidence indicates the costs are incurred on other than a straight-line basis. License fee revenue is recognized as earned, and no revenue is recognized until the inception of the license term. On occasion, agreements will contain milestones, or 3M will recognize revenue based on proportional performance. For these agreements, and depending on the specifics, 3M may recognize revenue upon completion of a substantive milestone, or in proportion to costs incurred to date compared with the estimate of total costs to be incurred. 3M is at the forefront of innovative technologies developed to address accurate identification, location and management surrounding a range of high-value assets in the healthcare environment. Taking an enterprise-wide approach, 3M delivers solutions that integrate seamlessly with existing systems and operational workflow, to enhance patient safety, optimize revenue and improve their operations. Now, 3M introduces a scalable track and trace solution for healthcare secure supply chain systems. Tracking assets such as pharmaceuticals, medical services and tissue samples from point of origin to point of use, 3M Secure Supply Chain Systems provide inventory, record management and reporting functions for manufacturers, distributors and clinics – employing encryption and RFID technology to store and transmit information. The 3M Secure Supply Chain System provides a complete solution – software, hardware, data hosting and integration services – to help manage the entire path. With strong experience in reliably tracking, protecting and managing assets and people, 3M Track and Trace Solutions blends more than 100 years of knowledge and ingenuity into their technology portfolio. This portfolio has grown over the last two decades to extend their market reach and lead advancements in Automatic Identification (Auto ID) technologies. Today, 3M Track and Trace Solutions has numerous patents covering RFID technology as well as access to the following Auto ID and location technology protocols: Barcode, Low Frequency RFID, High Frequency RFID, Ultra High Frequency RFID, Active RFID, RTLS and GPS. In addition to Auto ID, they deliver the software application, drivers and interfaces that allow the customer to automate processes as part of their workflow to generate a positive return on their investment. Financial Analysis. Before examining the financial statements of 3M, it is vital to understand the variety of activities this company performs. According to Reuters (ezinearticles), 3M is a "diversified technology company with a global presence in various businesses, including industrial and transportation, healthcare, display and graphics, consumer and office, safety, security and protection services, and electro and communications." The industrial and transportation business includes products such as food and beverage, personal care, and automobiles. More specific industrial products include polyester, foil, and tape. Specific transportation products are insulation components like catalytic converters. The health care segment produces supplies for medical, surgical, and dental use. The display and office business employs workers to produce stationary products, supply products, and home-improvement products. Office products like Post-it Memo Pads are also produced in this section. 3M also controls a safety segment and an electro and communications section, where the latter creates products including telecommunication fiber-optic products. The main idea to take from the different business of 3M is the hedging strategy. Instead of focusing on only one industry, 3M can have a section of its business prosper, while another section's growth slows. It is true that 3M may not experience any incredible share price appreciation because of its strategy, but 3M will not experience any dramatic share price fallout either. As evidence, since 1999, 3M has only had one distinct negative share price calendar year (2005), and that year only yielded a loss of 6%. Each year during this timeline before and after 2005, 3M has been flat or shown share price appreciation. In 2006 the share price rose about 5%, and in 2007 the share price is up over 30%. Throughout this period, the US economy has been through exuberant growth to panicked recession. However, because of 3M's strategy and investor's trust in such a well-respected brand, 3M has managed to avoid so terrible economic periods. While, 3M's business model is great, there are many other corporations in this industry that have similar strategies. What differentiate 3M however is its fundamentals. Over the last fiscal year, according to Reuters, 3M saw revenue at $22.9 billion dollars. This is an outstanding number. What is more outstanding is relative sales growth. 3M's recent sales figure was 7.86% higher than it was the previous fiscal year. Not only is this increase higher than its five year average, but it is also higher than the five year average of the conglomerate industry. Considering the size of sales volume, this is a great sign of growth. What is even more outstanding is earnings growth. 3M has been efficient with its costs and saw an increase in profits of over 32.76% last fiscal year. This number is higher than the company's five year average at 23.13% and also higher than the industry's average at 13.87%. Comparing this figure to industry competitors, United Technologies only saw a 13.72% increase during the same time period, Emerson Electric saw a 20.26% increase, and GE only had profits grow by 12.16%. Clearly 3M is growing and using good internal controls to reduce cost. Another way of illustrating 3M's strong growth is through its margins. Gross margins for 3M at 47.94% are quite high compared to the industry's average at 39.01%. 3M's gross margins are also higher than United Technologies' 26.78% figure, Emerson's 35.70% number, and GE's 42.83% margin. In addition, 3M's operating margins at 28.04% are also above the industry average at 15.24%, not to mention above the rest of the industry's respective figures. The more important margin, net profit margin, is also in favor of 3M. The past fiscal year illustrated this figure at 18.61%. The number is quite high compared to the company's five year average at 14.70%. In addition, 3M's number beats the industry average of 11.81%, United Technologies' figure at 8.10%, Emerson's margin at 9.29%, and GE's number at 12.88%. 3M is working very efficiently compared to its industry peers. It can use the extra cents it makes for every dollar to help the company and investors. Capital spending over the past five years for 3M is growing at 3.57%. This number is higher than the industry average of 0.98% and higher than most of the aforementioned companies. Higher capital spending now means even more efficiency in the future for 3M. Lower costs mean wider margins and a greater ability for 3M to buy back shares from investors or increase its dividend. While 3M's growth looks excellent, some investors may question the company's valuation. According to Reuters, the conglomerate industry has an earnings multiple of 19.92. Fortunately, for investors wanting to buy shares of this company, the forward P/E ratio for 3M is 18.99. This number is very similar to GE, Emerson, and United Technologies. In addition, 3M's forward price to sales ration of 2.82 is also similar to the mentioned companies. This indicator illustrates that not only is 3M growing quite strongly, but 3M is also undervalued compared to its growth across this industry. High growth and low valuation typically create a strong recipe for success. 3M's PEG ratio of 1.67 is near or below most of the industry competitors which again illustrates low valuation given growth. Analysis of Ratios In terms of other 3M strengths, this company is solvent with a 1.28 current ratio. The company is owned by more than 67% institutional investors. This indicates that the smartest investors like this company and want to take the risk to own it. The company's ROE of 39.97% is excellent. This number is above its five year average of 33.31% and also above the industry average of 20.97%. This number obliterates GE, United Technologies, and Emerson's figures. And if higher margins continue to be present for 3M, future buybacks will lead to even increased returns. 3M's ROA of 19.82% and ROI of 27.80% are also quite strong. 3M is also very efficient when it comes to turnover. Receiver turnover at 6.99 beats the industry average of 4.27 which means consumers pay their discounts or credit on average every 50 days. Asset turnover at 1.07 is also stronger than the industry average of 0.53, which means 3M's asset moves usually mean larger sales. Overall, there are plenty of advantages to owning 3M and its fundamentals. According to Forbes .com latest 12-month data of 3M is as under Latest 12 Months Data Items Latest Full Context Quarter Ending Date 2011/03 Gross Profit Margin 52.0% EBIT Margin 22.1% EBITDA Margin 26.0% Pre-Tax Profit Margin 21.3% Interest Coverage 30.7 Current Ratio 2.1 Quick Ratio 1.4 Leverage Ratio 1.9 Receivables Turnover 7.1 Inventory Turnover 4.2 Asset Turnover 0.9 Revenue to Assets 0.9 ROE from Total Operations 25.7% Return on Invested Capital 20.2% Return on Assets 13.6% Debt/Common Equity Ratio 0.27 Price/Book Ratio (Price/Equity) 3.91 Book Value per Share $23.21 Total Debt/ Equity 0.34 Long-Term Debt to Total Capital 0.21 SG&A as % of Revenue 20.6% R&D as % of Revenue 5.4% Receivables per Day Sales $54.85 Days CGS in Inventory 85 Working Capital per Share $9.49 Cash per Share $3.87 Cash Flow per Share $7.54 Free Cash Flow per Share $-0.20 Tangible Book Value per Share $10.37 Price/Cash Flow Ratio 12.0 Price/Free Cash Flow Ratio -454.0 Price/Tangible Book Ratio 8.75 Most recent data    5-Year Averages Return on Equity 31.1% Return on Assets 14.5% Return on Invested Capital 23.4% Gross Profit Margin 52.5% Pre-Tax Profit Margin 22.2% Post-Tax Profit Margin 15.3% Net Profit Margin (Total Operations) 15.3% R&D as a % of Sales 5.7% SG&A as a % of Sales 21.0% Debt/Equity Ratio 0.33 Total Debt/Equity Ratio 0.45 Most recent data    Investment Opportunities. Keeping in view the above mentioned data of 3M pertaining first quarter of 2011, now would be an excellent time to think about purchasing 3M shares. I would definitely buy 3M shares because the dividend yield for this company at 2.04% is very reasonable. In addition, technical indicators illustrate appreciating 50 day SMA and EMA indicators coupled with an up trending Parabolic SAR. The recent cross over of SMA and EMA a few weeks back indicates that 3M is ready to rise and should enjoy higher share price appreciation until the lines converge. Therefore, given the fundamental, technical, and strategy analysis, there are plenty of reasons for investors to purchase shares of 3M as a part of a diversified portfolio. SWOT Analysis Strengths . 1. Diversified businesses - industrial and transportation, healthcare, display and graphics, consumer and office, safety, security and protection services, and electro and communications. 2. Strong research and development capability. 3. Diversified geographic presence. 4. Solid revenue & profit growth. Weaknesses (subheading) 1. Low inventory turnover which impacts inventories and margins. 2. Weaker than expected performance in key segments. 3. Not as nimble as smaller, more focused competitors. 4. Lack of synergy between business units. Opportunities 1. Acquisitions in key operating areas. 2. Continued global expansion . 3. Rising healthcare spending in the US. 4. Security concerns with weaker economy in the US could present opportunities for 3M's security business. 5. Markets similar to areas it is currently in, such as renewable energy, water infrastructure, architecture, and lighting. Threats 1. Rising commodity and energy prices. 2. Exchange rates fluctuations . 3. Environmental regulations. 4. Consumer preferences and competitive conditions Conclusion In conclusion, 3M is a great and diverse company with a good dividend history and a reasonable payout. The balance sheet is strong and the valuation is quite reasonable. EPS for 2009 was $4.69. Projected EPS for 2010 and 2011 are $5.63 and $6.21 respectively. At the current price of about $81, this comes to a P/E of 17.2 for 2009, 14.4 for 2010, and 13 for 2011. These are of courses not necessarily reliable, but I do believe 3M will make up the earnings ground it has lost in last recession. 3M is a multinational company with branches operating all over the globe. 3M is looking to grow in the new markets for its long term strategy, and decided to service China, India, and Singapore. 3M expansion in the international markets and business strategy is build around its core competency of innovation.3M has adopted product differentiation strategy, and provide value proposition of cost effectiveness to the customers. 3M long term strategy is to realize economies of scale and location economies by moving some of its manufacturing in Singapore.3M is a decentralized company at the international level, whereas the decisions related to R&D, and finances are made at centralized level. Company has horizontal structure globally, and even at national levels. Today, after 109 years, 3M follows a business model based on "the ability to not only develop unique products, but also to manufacture them efficiently and consistently around the world (3M)." References 3M Vision, Objectives & Strategies.Retrieved from http://solutions.3m.com/wps/portal/3M/en_WW/Corp/Identity/Strategy/Policies/Vision/ Ezinearticles Retrieved from http://ezinearticles.com/?A-Financial-Analysis-of-3M-Company&id=768899 12 Months Data Retrieved from http://finapps.forbes.com/finapps/jsp/finance/compinfo/Ratios.jsp?tkr=MMM Read More