3M's current ratio is above the industry's current ratio, so its current liabilities are covered more times over than the average firm in its industry. Since short term debt is constantly changing, financial analysts focus more on the company s long term debt. It shows a better reflection of trade practice than debt management policy. 3M is below both the industry and the economy in its long term debt ratio. This means that if 3M was facing a strike and made no revenues and cash flows began to dry up, the company could operate on its own for 174 days.
Companies pay a lot of attention to their net profit margin which evaluates net income and sales.
The gross margin ratio shows that competing companies may be more cost-efficient than 3M. Gross margin is the profit after direct sales costs are taken out. This rate is good because it is just below the industry and the economy averages. This is good because it is very close to the industry's average. This shows that 3M is doing better than average, since the company's ratio is higher than the industry's. The most important ratio to look at the net profit margin.