Question

Compute and Interpret Measures for DuPont Disaggregation Analysis Balance sheets and income statements for 3M Company...

Compute and Interpret Measures for DuPont Disaggregation Analysis
Balance sheets and income statements for 3M Company follow.

3M Company
Consolidated Statements of Income
For Years Ended Dec. 31 ($millions) 2015 2014 2013
Net sales $30,674 $31,821 $30,871
Operating expenses
Cost of sales 15,383 16,447 16,106
Selling, general & administrative expenses 6,182 6,469 6,384
Research, development & related expenses 1,763 1,770 1,715
Total operating expenses 23,328 24,686 24,205
Operating income 7,346 7,135 6,666
Interest expense and income
Interest expense 149 142 145
Interest income (26) (33) (41)
Total interest expense -net 123 109 104
Income before income taxes 7,223 7,026 6,562
Provision for income taxes 2,167 2,028 1,841
Net income inc. noncontrolling interest 5,056 4,998 4,721
Less: Net income attributable to NCI 8 42 62
Net income attributable to 3M $5,048 $4,956 $4,659
3M Company
Consolidated Balance Sheets
At December 31 ($ millions, except per share amount) 2015 2014
Current assets
Cash and cash equivalents $1,898 $1,997
Marketable securities--current 198 1,519
Accounts receivable, net 4,154 4,238
Inventories:
Finished goods 1,655 1,723
Work in process 1,008 1,081
Raw materials and supplies 855 902
Total inventories 3,518 3,706
Other current assets 1,398 1,023
Total current assets 11,166 12,483
Marketable securities--noncurrent 9 15
Investments 117 102
Property, plant and equipment 23,098 22,841
Less: Accumulated depreciation (14,583) (14,352)
Property, plant and equipment--net 8,515 8,489
Goodwill 9,249 7,050
Intangible assets -net 2,601 1,435
Prepaid pension benefits 188 46
Other assets 1,053 1,769
Total assets $32,898 $31,389
Liabilities
Current liabilities
Short-term debt & current portion of LT debt $2,144 $186
Accounts payable 1,774 1,907
Accrued payroll 644 732
Accrued income taxes 332 435
Other current liabilities 2,404 2,884
Total current liabilities 7,298 6,144
Long-term debt 8,753 6,705
Pension and postretirement benefits 3,520 3,843
Other liabilities 1,580 1,555
Total liabilities 21,151 18,247
Equity
3M Company shareholders' equity:
Common stock, par value $0.01 per share;
Shares outstanding --2015: 609,330,124;
Shares outstanding --2014: 635,134,594 9 9
Additional paid-in capital 4,791 4,379
Retained earnings 36,575 34,317
Treasury stock (23,308) (19,307)
Accumulated other comprehensive income (loss) (6,359) (6,289)
Total 3M Company shareholders' equity 11,708 13,109
Noncontrolling interest 39 33
Total equity 11,747 13,142
Total liabilities and equity $32,898 $31,389

a. Compute the DuPont model component measures for profit margin, asset turnover, and financial leverage. Then, compute ROA.

Round profit margin and ROA to two decimal places (ex: 0.12345 = 12.35%)
Round asset turnover and financial leverage to three decimal places.

Profit margin Answer

%
Asset turnover Answer


Financial leverage Answer


ROA Answer

%


b. Compute ROE. Confirm that ROE equals ROE computed using the component measures from part a (ROE = PM x AT x FL).
Round answer to two decimal places (ex: 0.12345 = 12.35%)
Answer

%

c. Compute adjusted ROA (assume a statutory tax rate of 37% and pretax net interest expense of $123).
Round answer to two decimal places (ex: 0.12345 = 12.35%)
Answer

%

Homework Answers

Answer #1

a)

Profit Margin for 2015 = (Net Profit / Total Sales Revenue) * 100

= ($5048 / $30674) * 100

= 16.46%

Assets Turnover = Net Sales / Average Total Assets

= $30674 / (($31389+$32898)/2)

= $30674 / $32144

= 0.954

Financial Leverage Ratio = Total Debt / Stockholder's Equity

= ($8753 + $2144) / $11708

= $10897 / $11708

= 0.9307 times

ROA = Net Income / Average Total Assets

= $5048 / $32144

= 15.70%

b) ROE = Net Income / Stockholder's Equity

= $5048 / $11747

= 42.97%

c) Adjusting ROA = (Net income + Interest) / Average Assets

= ($5048 + $123) / $32144

= $5171 / $32144

= 16.09%

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Compute and Interpret Measures for DuPont Disaggregation Analysis Balance sheets and income statements for 3M Company...
Compute and Interpret Measures for DuPont Disaggregation Analysis Balance sheets and income statements for 3M Company follow. 3M Company Consolidated Statements of Income For Years Ended Dec. 31 ($millions) 2015 2014 2013 Net sales $31,718 $31,821 $30,871 Operating expenses Cost of sales 15,383 16,447 16,106 Selling, general & administrative expenses 6,182 6,469 6,384 Research, development & related expenses 1,763 1,770 1,715 Total operating expenses 23,328 24,686 24,205 Operating income 8,390 7,135 6,666 Interest expense and income Interest expense 149 142...
Compute and Interpret Measures for DuPont Disaggregation Analysis Balance sheets and income statements for 3M Company...
Compute and Interpret Measures for DuPont Disaggregation Analysis Balance sheets and income statements for 3M Company follow. 3M Company Consolidated Statements of Income For Years Ended Dec. 31 ($millions) 2015 2014 2013 Net sales $31,385 $31,821 $30,871 Operating expenses Cost of sales 15,383 16,447 16,106 Selling, general & administrative expenses 6,182 6,469 6,384 Research, development & related expenses 1,763 1,770 1,715 Total operating expenses 23,328 24,686 24,205 Operating income 8,057 7,135 6,666 Interest expense and income Interest expense 149 142...
Compute Measures for DuPont Disaggregation Analysis Use the information below for 2018 for 3M Company to...
Compute Measures for DuPont Disaggregation Analysis Use the information below for 2018 for 3M Company to answer the requirements (perform these computations from the perspective of a 3M shareholder). ($ millions) 2018 2017 Sales $32,765 Net income, consolidated 5,363 Net income attributable to 3M shareholders 5,349 Assets 36,500 $37,987 Total equity 9,848 11,622 Equity attributable to 3M shareholders 9,796 11,563 a. Compute return on equity (ROE).   Round answer to two decimal places (ex: 0.12345 = 12.35%) b. Compute the DuPont...
Compute and Analyze Measures for DuPont Disaggregation Analysis Balance sheets and income statements for Costco Wholesale...
Compute and Analyze Measures for DuPont Disaggregation Analysis Balance sheets and income statements for Costco Wholesale Corporation follow. Consolidated Statements of Earnings For Fiscal Years Ended ($ millions) September 1, 2013 September 2, 2012 August 28, 2011 Revenue Net Sales $102,870 $97,062 $87,048 Membership fees 2,286 2,075 1,867 Total revenue 105,156 99,137 88,915 Operating expenses Merchandise costs 91,948 86,823 77,739 Selling, general and administrative 10,104 9,518 8,691 Preopening expenses 51 37 46 Operating Income 3,053 2,759 2,439 Other income (expense)...
Selected balance sheet and income statement information for ABC follows. $ millions Jan. 31, 2016 Feb....
Selected balance sheet and income statement information for ABC follows. $ millions Jan. 31, 2016 Feb. 01, 2015 Operating assets $40,583 $38,473 Nonoperating assets 2,241 1,748 Total assets 42,824 40,221 Operating liabilities 15,018 13,527 Nonoperating liabilities 21,285 17,167 Total liabilities 36,303 30,694 Total stockholders' equity 6,521 9,527 Sales 88,999 Net operating profit before tax (NOPBT) 12,024 Nonoperting expense before tax 778 Tax expense 4,088 Net income 7,158 Round answers to two decimal places (ex: 0.12345 = 12.35%) a. Compute ROE...
Selected balance sheet and income statement information for TGHI follows. $ millions Jan. 31, 2016 Feb....
Selected balance sheet and income statement information for TGHI follows. $ millions Jan. 31, 2016 Feb. 01, 2015 Operating assets $40,583 $38,473 Nonoperating assets 2,241 1,748 Total assets 42,824 40,221 Operating liabilities 15,018 13,527 Nonoperating liabilities 21,285 17,167 Total liabilities 36,303 30,694 Total stockholders' equity 6,521 9,527 Sales 88,999 Net operating profit before tax (NOPBT) 12,024 Nonoperting expense before tax 778 Tax expense 4,088 Net income 7,158 Round answers to two decimal places (ex: 0.12345 = 12.35%) a. Compute ROE...
Compute ROE and RNOA with Disaggregation Selected balance sheet and income statement information for Home Depot...
Compute ROE and RNOA with Disaggregation Selected balance sheet and income statement information for Home Depot follows. $ millions                               Jan. 31, 2016             Feb. 01, 2015 Operating assets                        $40,333                     $38,223 Nonoperating assets                      2,216                       1,723 Total assets                                   42,549                     39,946 Operating liabilities                       14,918                     13,427 Nonoperating liabilities                 21,315                    17,197 Total liabilities                                36,233                  30,624 Total stockholders' equity                6,316                    9,322 Sales                                              88,519 (NOPBT)       11,774 Nonoperting expense before tax        753 Tax expense                                     4,012 Net income 7,009 Round all answers to two decimal places (ex: 0.12345 = 12.35%)...
Compute ROE and RNOA with Disaggregation Selected balance sheet and income statement information for Home Depot...
Compute ROE and RNOA with Disaggregation Selected balance sheet and income statement information for Home Depot follows. $ millions Jan. 31, 2016 Feb. 01, 2015 Operating assets $40,783 $38,673 Nonoperating assets 2,291 1,798 Total assets 43,074 40,471 Operating liabilities 15,068 13,577 Nonoperating liabilities 21,270 17,152 Total liabilities 36,338 30,729 Total stockholders' equity 6,736 9,742 Sales 89,464 Net operating profit before tax (NOPBT) 12,224 Nonoperting expense before tax 828 Tax expense 4,523 Net income 6,873 Round answers to two decimal places...
Compute and Compare ROE, ROA, and RNOA Selected balance sheet and income statement information for Oracle...
Compute and Compare ROE, ROA, and RNOA Selected balance sheet and income statement information for Oracle Corporation follows. (Perform the required computations from the perspective of an Oracle shareholder. $ millions May 31, 2015 May 31, 2014 Operating assets $52,091 $47,003 Nonoperating assets 54,368 38,819 Total assets 106,459 85,822 Operating liabilities 19,725 18,600 Nonoperating liabilities 41,958 24,097 Total liabilities 61,683 42,697 Total Oracle stockholders' equity 44,776 43,125 Total revenues 38,104 Operating income before tax 13,538 Nonoperating expense before tax 1,037...
Analysis and Interpretation of Profitability Balance sheets and income statements for Best Buy Co., Inc. follow....
Analysis and Interpretation of Profitability Balance sheets and income statements for Best Buy Co., Inc. follow. Consolidated Statements of Earnings For Fiscal Years Ended ($ millions) February 27, 2010 February 28, 2009 March 1, 2008 Revenue $ 49,694 $ 45,015 $ 40,023 Cost of goods sold 37,534 34,017 30,477 Restructuring charges - cost of goods sold -- -- -- Gross Profit 12,160 10,998 9,546 Selling, general and administrative expenses 9,873 8,984 7,385 Restructuring charges 52 78 -- Goodwill and tradename...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT