Review how the 3M Company compares to the industry averages in term...

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Review how the 3M Company compares to the industry averages in terms of financial profitability, liquidity and solvency, and why the difference is important. Also review the financial statements over the last three years, and discuss any positive and negative trends would you report to the company's management.

Question: Explain why Solvency and why the difference is important
Compare 2015 to 2016

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Solvency is important for the organization as it ensures that the company has the right mix of debt and equity so that the weighted average cost of capital is optimized and the shareholder’s wealth is maximized. It is best measured by the financial leverage ratio and it has increased from 2.79 to 3.20 over the period 2015 – 2016 which means that the company is deploying higher levels of debt to finance its asset mix....

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