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Can anyone help me solve these accounting questions? Analysis and Interpretation of Profitability Balance sheets and income statements for 3M Company follow. Consolidated Statements of
Can anyone help me solve these accounting questions?
Analysis and Interpretation of Profitability Balance sheets and income statements for 3M Company follow. Consolidated Statements of Income Years ended December 31 ($ millions) 2010 2009 2008 $26,66 $23,123 $25,269 2 Net sales Operating expenses Cost of sales 13,831 12,109 13,379 Selling, general and administrative expenses 5,479 4,907 5,245 Research, development and related expenses 1,434 1,293 1,404 -- -- 23 20,744 18,309 20,051 5,918 4,814 5,218 201 219 215 (38) (37) (105) 163 182 110 5,755 4,632 5,108 1,592 1,388 1,588 4,163 3,244 3,520 78 51 60 $ 4,085 $ 3,193 $ 3,460 Loss/(gain) from sale of business Total operating expenses Operating income Interest expenses and income Interest expense Interest income Total interest expense Income before income taxes Provision for income taxes Net income including noncontrolling interest Less: Net income attributable to noncontrolling interest Net income Consolidated Balance Sheets ($ millions) 2010 2009 $ 3,377 $ 3,040 Marketable securities-current 1,101 744 Accounts receivable-net 3,615 3,250 1,476 1,255 950 815 Assets Current Assets Cash and cash equivalents Inventories Finished goods Work in process Consolidated Balance Sheets ($ millions) 2010 2009 729 569 3,155 2,639 967 1,122 12,215 10,795 Marketable securities-noncurrent 540 825 Investments 146 103 20,253 19,440 Raw materials and supplies Total inventories Other current assets Total current assets Property, plant and equipment Less: Accumulated depreciation (12,974) (12,440) Property, plant and equipment-net 7,279 7,000 Goodwill 6,820 5,832 Intangible assets-net 1,820 1,342 74 78 1,262 1,275 Prepaid pension benefits Other assets Total assets $ 30,156 $ 27,250 Liabilities Current liabilities Short-term borrowings and current portion of long-term debt $ 1,269 $ 613 1,662 1,453 Accrued payroll 778 680 Accrued income taxes 358 252 2,022 1,899 Total current liabilities 6,089 4,897 Long-term debt 4,183 5,097 Pension and postretirement benefits 2,013 2,227 1,854 1,727 14,139 13,948 9 9 Accounts payable Other current liabilities Other liabilities Total liabilities Equity 3M Company shareholders' equity: Common stock, par value $.01 per share; Consolidated Balance Sheets ($ millions) Additional paid-in capital Retained earnings Treasury stock Accumulated other comprehensive income (loss) Total 3M Company shareholders' equity Noncontrolling interest Total equity Total liabilities and equity 2010 2009 3,468 3,153 25,995 23,753 (10,266) (10,397) (3,543) (3,754) 15,663 12,764 354 538 16,017 13,302 $ 30,156 $ 27,250 (a) Compute net operating profit after tax (NOPAT) for 2010. Assume that the combined federal and statutory rate is: 37.0% (Round your answer to the nearest whole number.) 2010 NOPAT =Answer ($ millions) (b) Compute net operating assets (NOA) for 2010 and 2009. Treat noncurrent Investments as a nonoperating item. 2010 NOA =Answer ($ millions) 2009 NOA =Answer ($ millions) (c) Compute 3M's RNOA, net operating profit margin (NOPM) and net operating asset turnover (NOAT) for 2010. (Round your answers to two decimal places. Do not round until your final answer. Do not use NOPM x NOAT to calculate RNOA.) 2010 RNOA =Answer % 2010 NOPM =Answer % 2010 NOAT =Answer (d) Compute net nonoperating obligations (NNO) for 2010 and 2009. 2010 NNO =Answer ($ millions) 2009 NNO =Answer ($ millions) (e) Compute return on equity (ROE) for 2010. (Round your answers to two decimal places. Do not round until your final answer.) 2010 ROE =Answer 28.74 % (f) What is the nonoperating return component of ROE for 2010? (Round your answers to two decimal places.) 2010 nonoperating return =Answer % (g) Which of the following statements reflects the best inference we can draw from the difference between 3M's ROE and RNOA? ROE > RNOA implies that 3M has taken on too much financial leverage. ROE > RNOA implies that 3M is able to borrow money to fund operating assets that yield a return greater than its cost of debt. ROE > RNOA implies that 3M's equity has grown faster than its NOA. ROE > RNOA implies that 3M has increased its financial leverage during the periodStep by Step Solution
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