Compute Measures for DuPont Disaggregation AnalysisUse the information below for 2018 for 3M Company to answer the requirements($ millions)SalesNet income, consolidatedNet income attributable to 3M shareholdersPretax interest expenseAssetsTotal equityEquity attributable to 3M shareholdersa. Compute return on equity (ROE) from the perspective of a 3M shareholder.Note: 1. Select the appropriate numerator and denominator used to compute ROE from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute ROE.NumeratorDenominatorROENet income consolidated$2018 2017$32,7655,3635,34920736,500 $37,9879,848 11,6229,796 11,563Sales$+ x Average total equity5,349 $Financial leverage (EL)b. Compute the DuPont model component measures for profit margin, asset turnover, and financial leverage. (Perform these computations from a consolidated perspective).Profit Margin (PM)Note: 1. Select the appropriate numerator and denominator used to compute PM from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute PM.NumeratorDenominatorPMNet income consolidated (adjusted)S+ x Sales5,546 * $수 x10,679.5 ✔+ ✔ Average assets0x $✔31,385 xAsset turnover (AT)Note: 1. Select the appropriate numerator and denominator used to compute AT from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute AT.NumeratorDenominatorAT50.09%✔0x17.67% Sales$Net income consolidated$✔ Average assets0x SFinancial leverage (FL)Note: 1. Select the appropriate numerator and denominator used to compute FL from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute FL.NumeratorDenominatorx Net income attributable to 3M shareholders0x SCheck✔-0xDenominatorx Net income attributable to 3M shareholders0x5c. Compute ROANote: 1. Select the appropriate numerator and denominator used to compute ROA from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute ROA.NumeratorROANet income consolidated (adjusted)SX0xDenominator✔Net income consolidated (adjusted)0x50xFLd. Compute adjusted ROA (assume a statutory tax rate of 22% and pretax net interest expense of $207).Note: 1. Select the appropriate numerator and denominator used to compute adjusted ROA from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute adjusted ROA.ROANumeratorNet income consolidated (adjusted)S+ x96

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ales Net income consolidated 5 ✓ Average assets 0x5 inancial leverage (FL) ote: 1. Select the appropriate numerator and denominator used to compute FL from the drop-down menu options. 2. Enter the numerator and deno Numerator Numerator Net income consolidated (adjusted) S 0x Denominator x Net income attributable to 3M shareholders + x 0x S 0x Compute ROA Note: 1. Select the appropriate numerator and denominator used to compute ROA from the drop-down menu options. 2. Enter the numerator and der ROA Denominator x Net income attributable to 3M shareholders : 0x5 Denominator # ✔Net income consolidated (adjusted) 0x5 x + ох FL d. Compute adjusted ROA (assume a statutory tax rate of 22% and pretax net interest expense of $207). Note: 1. Select the appropriate numerator and denominator used to compute adjusted ROA from the drop-down menu options. 2. Enter the numerator Numerator ROA Net income consolidated (adjusted) Ĉ X Ox 96

ales Net income consolidated 5 ✓ Average assets 0x5 inancial leverage (FL) ote: 1. Select the appropriate numerator and denominator used to compute FL from the drop-down menu options. 2. Enter the numerator and deno Numerator Numerator Net income consolidated (adjusted) S 0x Denominator x Net income attributable to 3M shareholders + x 0x S 0x Compute ROA Note: 1. Select the appropriate numerator and denominator used to compute ROA from the drop-down menu options. 2. Enter the numerator and der ROA Denominator x Net income attributable to 3M shareholders : 0x5 Denominator # ✔Net income consolidated (adjusted) 0x5 x + ох FL d. Compute adjusted ROA (assume a statutory tax rate of 22% and pretax net interest expense of $207). Note: 1. Select the appropriate numerator and denominator used to compute adjusted ROA from the drop-down menu options. 2. Enter the numerator Numerator ROA Net income consolidated (adjusted) Ĉ X Ox 96

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question 51: In the vertical analysis of an income statement, what is the base (100%) figure? Answer: A. Total expenses B. Total revenues C. Total assets D. Net income
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