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 | $30,274 | $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 | 6,946 | 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 | 6,823 | 7,026 | 6,562 | |
Provision for income taxes | 1,982 | 2,028 | 1,841 | |
Net income inc. noncontrolling interest | 4,841 | 4,998 | 4,721 | |
Less: Net income attributable to NCI | 8 | 42 | 62 | |
Net income attributable to 3M | $4,833 | $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 | $1,798 | $1,897 | |
Marketable securities--current | 118 | 1,439 | |
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 | 10,986 | 12,303 | |
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 | $32,718 | $31,209 | |
Liabilities | |||
Current liabilities | |||
Short-term debt & current portion of LT debt | $2,044 | $106 | |
Accounts payable | 1,694 | 1,807 | |
Accrued payroll | 644 | 732 | |
Accrued income taxes | 332 | 435 | |
Other current liabilities | 2,404 | 2,884 | |
Total current liabilities | 7,118 | 5,964 | |
Long-term debt | 8,753 | 6,705 | |
Pension and postretirement benefits | 3,520 | 3,843 | |
Other liabilities | 1,580 | 1,555 | |
Total liabilities | 20,971 | 18,067 | |
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 | $32,718 | $31,209 |
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 :
Asset turnover :
Financial leverage:
ROA :
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 $123).
Round answer to two decimal places (ex: 0.12345 = 12.35%)
Answer
Please find below table useful to compute desired results: -
End results would be as follows: -
Compute and Interpret Measures for DuPont Disaggregation Analysis Balance sheets and income statements for 3M Company...
Thanks.
Compute and Interpret Measures for DuPont Disaggregation Analysis Use the information below for 3M Company to answer the requirements (perform these computations from the perspective of a 3M shareholder). ($millions) 2015 2014 Sales $30,674 Net income, consolidated 5,056 Net income attributable to 3M shareholders 5,048 Assets 32,898 $31,389 Total equity 11,747 Equity attributable to 3M shareholders 11,708 13,109 13,142 a. Compute return on equity (ROE). Round answer to two decimal places (ex: 0.12345 = 12.35%) X % b. Compute...
Compute Measures for DuPont Disaggregation Analysis Use the information below for 2018 for 3M Company to answer the requirements (perform these computations from the perspective of a 3M shareholder). ($ 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%) 54.6 X % b....
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). (5 millions) 2018 2017 Sales $32.765 Net income, consolidated 5.363 Net income attributable to 3M shareholders 5.349 Assets 36,500 $37,087 Total equity 9,848 11.622 Equity attributable to 3M shareholders 9,796 11.563 a. Compute return on equity (ROE). Round answer to two decimal places (ex: 0.12345 - 12.35%) 37.15 X 96 b....
Balance sheets and income statements for 3M Company follow. 3M Company Consolidated Statements of Income For Years Ended Dec. 31 ($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...
Use
the information below for 2018 for 3M Company to answer the
requirements (perform these computations from the perspective of a
3M shareholder).
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). (5 millions) 2018 2017 Sales $32,765 Net income, consolidated 5.363 Net Income attributable to 3M shareholders 5.349 Assets 36,500 $37.987 9,848 11,622 Equity attributable to 3M shareholders 9.796...
Apply DuPont Disaggregation of ROE Selected balance sheet and income statement information for Home Depot follows. $ millions Jan. 31, 2016 Feb. 01, 2015 Operating assets $40,333 $38,223 Nonoperating assets 2,216 1,723 Total assets 42,549 39,946 Operating liabilities 14,918 13,427 Nonoperating liabilities 21,315 17,197 Total liabilities 36,233 30,624 Total stockholders' equity 6,316 9,322 Sales 88,519 Net operating profit before tax (NOPBT) 11,774 Nonoperting expense before tax 753 Tax expense 4,012 Net income 7,009 Round answers to two decimal places (ex:...
Analysis and Interpretation of Profitability Balance sheets and income statements for 3M Company follow. 3M COMPANY Consolidated Statements of Income For Years ended December 31 ($ millions) 2015 2014 2013 Net sales $30,274 $31,821 $30,871 Operating expenses Cost of sales 15,383 16,447 16,106 Selling, general and administrative expenses 6,182 6,469 6,384 Research, development and related expenses 1,763 1,770 1,715 Total operating expenses 23,328 24,686 24,205 Operating income 6,946 7,135 6,666 Interest expenses and income Interest expense 149 142 145 Interest...
Analysis and Interpretation of Profitability Balance sheets and income statements for 3M Company follow. 3M COMPANY Consolidated Statements of Income For Years ended December 31 ($ millions) 2015 2014 2013 Net sales $30,274 $31,821 $30,871 Operating expenses Cost of sales 15,383 16,447 16,106 Selling, general and administrative expenses 6,182 6,469 6,384 Research, development and related expenses 1,763 1,770 1,715 Total operating expenses 23,328 24,686 24,205 Operating income 6,946 7,135 6,666 Interest expenses and income Interest expense 149 142 145 Interest...
Apply DuPont Disaggregation of ROE Selected balance sheet and income statement information for Home Depot follows. $ millions Jan. 31, 2016 Feb. 01, 2015 Total assets $42,824 $40,221 Total liabilities 36,358 30,749 Sales 88,944 Net income 7,038 Round answers to two decimal places (ex: 0.12345 = 12.35%) a. Compute ROE and disaggregate the ratio into its DuPont components of ROA and financial leverage. ROE: 0 % ROA: 0 % Financial leverage: 0 b. Disaggregate ROA in to profitability and productivity...
PLease answer A-D
P4-41. Analysis and Interpretation of Profitability Balance sheets and income statements for 3M Company follow. 3M COMPANY Consolidated Statements of Income For Years Ended Dec. 31 ($ millions) 2015 2013 2014 $31,821 $30,274 $30,871 15,383 6,182 1,763 16,447 6,469 1,770 24,686 7135 16,106 6,384 1,715 24,205 6,666 23,328 6,946 Net sales ............................................ Operating expenses Cost of sales. Selling, general and administrative expenses ......... Research, development and related expenses ........ Total operating expenses....... Operating income..... Interest expense and...