Question
Please help with this problem. Analysis and Interpretation of Profitability Balance sheets and income statements for 3M Company follow. Consolidated Statements of Income Years ended
Please help with this problem.
Analysis and Interpretation of Profitability Balance sheets and income statements for 3M Company follow.
Consolidated Statements of Income | |||
---|---|---|---|
Years ended December 31 ($ millions) | 2008 | 2007 | 2006 |
Net sales | $25,269 | $24,462 | $22,923 |
Operating expenses | |||
Cost of sales | 13,379 | 12,735 | 11,713 |
Selling, general and administrative expenses | 5,245 | 5,015 | 5,066 |
Research, development and related expenses | 1,404 | 1,368 | 1,522 |
Loss/(gain) from sale of business | 23 | (849) | (1,074) |
Total operating expenses | 20,051 | 18,269 | 17,227 |
Operating income | 5,218 | 6,193 | 5,969 |
Interest expenses and income | |||
Interest expense | 215 | 210 | 122 |
Interest income | (105) | (132) | (51) |
Total interest expense | 110 | 78 | 71 |
Income before income taxes | 5,108 | 6,115 | 5,625 |
Provision for income taxes | 1,588 | 1,964 | 1,723 |
Net income including noncontrolling interest | 3,520 | 4,151 | 3,902 |
Less: Net income attributable to noncontrolling interest | 60 | 55 | 51 |
Net income | $ 3,460 | $ 4,096 | $ 3,851 |
Consolidated Balance Sheets | ||
---|---|---|
($ millions) | 2008 | 2007 |
Assets | ||
Current Assets | ||
Cash and cash equivalents | $ 1,849 | $ 1,896 |
Marketable securities-current | 373 | 579 |
Accounts receivable-net | 3,195 | 3,362 |
Inventories | ||
Finished goods | 1,505 | 1,349 |
Work in process | 851 | 880 |
Raw materials and supplies | 657 | 623 |
Total inventories | 3,013 | 2,852 |
Other current assets | 1,168 | 1,149 |
Total current assets | 9,598 | 9,838 |
Marketable securities-noncurrent | 352 | 480 |
Investments | 111 | 298 |
Property, plant and equipment | 18,812 | 18,390 |
Less: Accumulated depreciation | (11,926) | (11,808) |
Property, plant and equipment-net | 6,886 | 6,582 |
Goodwill | 5,753 | 4,589 |
Intangible assets-net | 1,398 | 801 |
Prepaid pension benefits | 36 | 1,378 |
Other assets | 1,659 | 728 |
Total assets | $ 25,793 | $ 24,694 |
Liabilities | ||
Current liabilities | ||
Short-term borrowings and current portion of long-term debt | $ 1,552 | $ 901 |
Accounts payable | 1,301 | 1,505 |
Accrued payroll | 644 | 580 |
Accrued income taxes | 350 | 543 |
Other current liabilities | 1,992 | 1,833 |
Total current liabilities | 5,839 | 5,362 |
Long-term debt | 5,166 | 4,019 |
Pension and postretirement benefits | 2,847 | -- |
Other liabilities | 1,637 | 3,566 |
Total liabilities | 15,489 | 12,947 |
Equity | ||
3M Company shareholders' equity | 9 | 9 |
Additional paid-in capital | 3,006 | 2,785 |
Retained earnings | 22,227 | 20,316 |
Treasury stock | (11,676) | (10,520) |
Accumulated other comprehensive income (loss) | (3,686) | (843) |
Total 3M Company shareholders' equity | 9,880 | 11,747 |
Noncontrolling interest | 424 | -- |
Total equity | 10,304 | 11,747 |
Total liabilities and equity | $ 25,793 | $ 24,694 |
(a) Compute net operating profit after tax (NOPAT) for 2008. Assume that the combined federal and statutory rate is: 35.9% (Round your answer to the nearest whole number.) 2008 NOPAT =Answer
($ millions) (b) Compute net operating assets (NOA) for 2008 and 2007. Treat noncurrent Investments as a nonoperating item. 2008 NOA =Answer($ millions) 2007 NOA =Answer($ millions) (c) Compute 3M's RNOA, net operating profit margin (NOPM) and net operating asset turnover (NOAT) for 2008. (Round your answers to two decimal places. Do not round until your final answer. Do not use NOPM x NOAT to calculate RNOA.) 2008 RNOA =Answer% 2008 NOPM =Answer% 2008 NOAT =Answer (d) Compute net nonoperating obligations (NNO) for 2008 and 2007. 2008 NNO =Answer($ millions) 2007 NNO =Answer($ millions) (e) Compute return on equity (ROE) for 2008. (Round your answers to two decimal places. Do not round until your final answer.) 2008 ROE =Answer% (f) What is the nonoperating return component of ROE for 2008? (Round your answers to two decimal places.) 2008 nonoperating return =Answer%
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