For Years ended December 31 ($ millions) 2018 2017 Net sales $32,765 $31,657 Operating expenses Cost of sales 16,682 16,055 Selling, general and administrative expenses 7,602 6,626 Research, development and related expenses 1,821 1,870 Gain on sale of businesses (547) (586) Total operating expenses 25,558 23,965 Operating income 7,207 7,692 Other expense, net* 207 144 Income before income taxes 7,000 7,548 Provision for income taxes 1,637 2,679 Net income including noncontrolling interest 5,363 4,869 Less: Net income attributable to noncontrolling interest 11 Net income attributable to 3M $ 5,349 $ 4,858 *Interest expense, gross $350 million in 2018 and $322 million in 2017. 14 2018 2017 3M COMPANY Consolidated Balance Sheets At December 31 ($ millions, except per share amount) Current Assets Cash and cash equivalents Marketable securities Accounts receivable Total inventories Prepaids Other current assets Total current assets Property, plant and equipment-net Goodwill Intangible assets-net Other assets Total assets $ 2,853 $3,053 380 1,076 5,020 4,911 4,366 4,034 741 937 349 266 13,709 14,277 8,738 8,866 10,051 10,513 2,657 2,936 1,345 1,395 $36,500 $37,987 2,775 2,709 7,244 7,687 13,411 12,096 2,987 3,620 3,010 2,962 26,652 26,365 Other current liabilities Total current liabilities Long-term debt Pension and postretirement benefits Other liabilities Total liabilities 3M Company shareholders' equity Common stock, par value 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 $9 $9 5,643 5,352 40,636 39,115 (29,626) (25,887) (6,866) (7,026) 9,796 11,563 52 59 9,848 11,622 $36,500 $37.987 (c) Compute and disaggregate 3M's RNOA into net operating profit margin (NOPM) and net operating asset turnover (NOAT) for 2018. Demonstrate that RNOA = NOPM * NOAT. (Round your answers to two decimal places. Do not round until your final answer. Do not use NOPM x NOAT to calculate RNOA.) 2018 RNOA - 25.89 2018 NOPM = 16.86 % 2018 NOAT = 26.87 X