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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 model component measures for profit margin, asset turnover, and financial leverage.
- Round profit margin to two decimal places (ex: 0.12345 = 12.35%)
- Round asset turnover and financial leverage to three decimal places.
Profit margin?
Asset turnover?
Financial leverage?
c. Compute ROA
d. Compute adjusted ROA (assume a statutory tax rate of 22% and
pretax net interest expense of $207).
Round answer to two decimal places
Homework Answers
Answer #1
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