A company's liquidity position can be assessed using several ratios that evaluate current assets and liabilities as well as a company's ability to settle short-term debts (Gibson, 2011). These ratios can provide insight into a company's ability to repay its short-term debts (Gibson, 2011). In turn, they suggest a company's ability to satisfy its debts in the future (Gibson, 2011). This article will use financial statement data cited in Gibson (2011) from 3M Company (3M) to better understand liquidity measures to assess a company's total liquidity position. The following article will focus on various liquidity calculations, their meaning and interpretation in relation to 3M. Finally, an overall view of 3M's liquidity position will be assessed. By analyzing a company using ratios, one can assess the effectiveness of its management as well as its strengths and weaknesses (Žager, Sačer and Dečman, 2012). A company's accounts receivable constitutes amounts owed to the company by customers, employees, or the government (Gibson, 2011). The account generally increases as a result of normal business operations in which a company offers products or services to its customers on account (Gibson, 2011). A company's receivables sales days are one of two measurement tools used to assess the liquidity of a company's trade receivables (Gibson, 2011). It is considered an indicator of a company's ability to raise funds in relation to the credit conditions it offers to its customers (Bujaki and Durocher, 2012; Gibson, 2011). Essentially, it calculates the average age of a company's accounts receivable at the end of the year (Bujaki & Durocher, 2012; Gibson, 2011). As shown in Table 1, 3M's receivables were 51.28 days old in 2007 and 47.38 days... ... middle of document ......these are the result of real improvements processes and not the effects of changes in accounting methods, relaxations of credit conditions or other manipulations (Gibson, 2011). Any negative trends should be reviewed and adjustments made to avoid further deterioration of the company's liquidity position. Works CitedBujaki, M. and Durocher, S. (2012). Industry identification through ratio analysis. Accounting Perspectives, 11(4), 315-322. http://dx.doi.org/10.1111/1911-3838.12003 Gibson, C. H. (2011). Financial reporting and analysis: use of financial accounting information. (12th ed.). Mason, OH: South-Western Cengage Learning.Žager, K., Sačer, I., and Dečman, N. (2012). Financial ratios as an instrument for assessing business quality in small and medium-sized enterprises. International Journal of Case Management, 14(4), 373-385. Retrieved from http://www.ijmc.org