Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

3. Compute and Interpret Measures for DuPont Disaggregation Analysis (12 points) Use the information below for 3M Company to answer the requirements (perform these computations

image text in transcribed
3. Compute and Interpret Measures for DuPont Disaggregation Analysis (12 points) Use the information below for 3M Company to answer the requirements (perform these computations from the perspective of a 3M shareholder). Smillies) 2015 2014 Sales ISOTOS! Net income, consolidated Net income alibutable to JM starebolders Asses Total city Equity attributable to lM shareholders 5.312 33018531.500 11.347 13.14 11,708 13.100 1) Compute return on equity (ROE) of 3M in the year of 2015. Please show your computation Round answer to two decimal places (ex: 0.12345 12.35%) ROE 2) Compute the DuPont model component measures for profit margin, asset turnover, and financial leverage. Please show your computations 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 - 3) Assume the industry sector that 3M is operating has the following ratios on average: ROE -20% Profit margin-8% Assets turnover ratio=0.84 Financial leverage = 3 Please comment on 3M's ROE, profitability, assets efficiency, and financial leverage by comparing its ratios to the industry averages

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Morse Hartgraves

8th Edition

1618532359, 9781618532350

More Books

Students also viewed these Accounting questions