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

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%

Marked out of 8.00 P Flag question Question 2 Not complete Compute and Interpret Measures for DuPont Disaggregation Analysis Balance sheets and income statements for 3M Company follow. 3M Company Consolidated Statements of Income 2015 2014 2013 For Years Ended Dec. 31 (Smillions) $29,874 $31,821 $30,871 Net sales Operating expenses Cost of sales 15,383 16,447 16,106 6,182 Selling general & administrative expenses 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 6,546 7,135 6,666 Interest expense and income Interest expense 149 - 142 145 Interest income (26) (33) Total interest expense -net 123 109104 Income before income taxes 6,423 7,026 6,562 Provision for income taxes 1,927 2,028 1,841 Net income inc. noncontrolling interest 4,496 4,998 4,721 Less: Net income attributable to NCI 2 42 62 Net income attributable to 3M $4,488 $4,956 $4,659 2014 3M Company Consolidated Balance Sheets At December 31 ($ millions, except per share amount) 2015 Current assets Cash and cash equivalents $1,718 Marketable securities--current 18 Accounts receivable.net 4.154 $1,817 1,339 4.238 Business Course Return to course 3M Company Consolidated Balance Sheets At December 31($ millions, except per share amount) 2015 2014 Current assets Cash and cash equivalents $1,718 $1,817 Marketable securities--current 18 1,339 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 855902 Total inventories 3,518 3,706 Other current assets 1,398 1,023 Total current assets 10,806 12,123 Marketable securities--noncurrent 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 $32,538 $31,029 Liabilities Current liabilities Short-term debt & current portion of LT debt $1,964 $6 Accounts payable 1,594 1,727 Accrued payroll 644 732 Accrued income taxes 332 435 Other current liabilities 2,404 2,884 Total current liabilities 6,938 5,784 Long-term debt 8.753 6 705 Property, plant and equipment--net Goodwill Intangible assets -net Prepaid pension benefits Other assets Total assets 9,249 7,050 2,601 1,435 188 46 1,053 1,769 $32,538 $31,029 $6 1,727 $1,964 1,594 644 332 2,404 6,938 8,753 3,520 1,580 20,791 732 435 2,884 5,784 6,705 3,843 1,555 17,887 Liabilities Current liabilities Short-term debt & current portion of LT debt Accounts payable Accrued payroll Accrued income taxes Other current liabilities Total current liabilities Long-term debt Pension and postretirement benefits Other liabilities Total liabilities 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 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 4,791 4,379 36,575 34,317 (23,308) (19,307) (6,359) (6,289) 11,708 13,109 33 11,747 13.142 $32,538 $31,029 39 a. Compute the DuPont model component measures for profit margin, asset turno Round profit margin and ROA to two decimal places (ex: 0.12345 - 12.35%) Round asset turnover and financial leverage to three decimal places. Marked out of 8.00 P Flag question Question 2 Not complete Compute and Interpret Measures for DuPont Disaggregation Analysis Balance sheets and income statements for 3M Company follow. 3M Company Consolidated Statements of Income 2015 2014 2013 For Years Ended Dec. 31 (Smillions) $29,874 $31,821 $30,871 Net sales Operating expenses Cost of sales 15,383 16,447 16,106 6,182 Selling general & administrative expenses 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 6,546 7,135 6,666 Interest expense and income Interest expense 149 - 142 145 Interest income (26) (33) Total interest expense -net 123 109104 Income before income taxes 6,423 7,026 6,562 Provision for income taxes 1,927 2,028 1,841 Net income inc. noncontrolling interest 4,496 4,998 4,721 Less: Net income attributable to NCI 2 42 62 Net income attributable to 3M $4,488 $4,956 $4,659 2014 3M Company Consolidated Balance Sheets At December 31 ($ millions, except per share amount) 2015 Current assets Cash and cash equivalents $1,718 Marketable securities--current 18 Accounts receivable.net 4.154 $1,817 1,339 4.238 Business Course Return to course 3M Company Consolidated Balance Sheets At December 31($ millions, except per share amount) 2015 2014 Current assets Cash and cash equivalents $1,718 $1,817 Marketable securities--current 18 1,339 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 855902 Total inventories 3,518 3,706 Other current assets 1,398 1,023 Total current assets 10,806 12,123 Marketable securities--noncurrent 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 $32,538 $31,029 Liabilities Current liabilities Short-term debt & current portion of LT debt $1,964 $6 Accounts payable 1,594 1,727 Accrued payroll 644 732 Accrued income taxes 332 435 Other current liabilities 2,404 2,884 Total current liabilities 6,938 5,784 Long-term debt 8.753 6 705 Property, plant and equipment--net Goodwill Intangible assets -net Prepaid pension benefits Other assets Total assets 9,249 7,050 2,601 1,435 188 46 1,053 1,769 $32,538 $31,029 $6 1,727 $1,964 1,594 644 332 2,404 6,938 8,753 3,520 1,580 20,791 732 435 2,884 5,784 6,705 3,843 1,555 17,887 Liabilities Current liabilities Short-term debt & current portion of LT debt Accounts payable Accrued payroll Accrued income taxes Other current liabilities Total current liabilities Long-term debt Pension and postretirement benefits Other liabilities Total liabilities 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 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 4,791 4,379 36,575 34,317 (23,308) (19,307) (6,359) (6,289) 11,708 13,109 33 11,747 13.142 $32,538 $31,029 39 a. Compute the DuPont model component measures for profit margin, asset turno Round profit margin and ROA to two decimal places (ex: 0.12345 - 12.35%) Round asset turnover and financial leverage to three decimal places