After analyzing 3M's annual balance sheets for the past five financial years, we can compare the company's assets and liabilities and predict its future progress. 3M's current ratio is positive because its current assets are all higher than that of its current liabilities. This signifies that 3M has the financial ability to deal with their short term current liabilities from internal financing. The company does not have to rely on external financing, such as banks and other lenders. In addition, 3M's profit margins have been on the rise as well, which is of great interest to shareholders. It measures how well managers are able to turn sales into profits.
Since 1916, 3M has been paying their shareholders cash dividends every quarter. The cash dividend per share is $2.20 billion which steadily grew from $1.92 billion in 2007. In order for investors and traders to make buying and selling decisions, they depend on stock analysis. With this method, they are able to study and evaluate past and current data of the company.
Even though the company is continuing to grow, shareholders must decide whether or not their investment will have a margin of safety. They must buy at prices that are below their value. The intrinsic value indicates that the stock price is a good investment if the price falls to a level with a margin of safety.
The company is efficiently operating its business to be able to meet their financial needs. To continue to meet these needs, the company should increase the power of its current assets to always be well above the overall liabilities. Production should reduce material and operating expenses, and in the long run it could save a great amount in operating...