Analysis and Interpretation of Liquidity and Solvency Balance sheets and income statements for 3M Company follow. 3M COMPANY Consolidated Statements of Income For Years Ended December 31 ($ millions) Net sales Operating expenses Cost of sales 16,682 16,055 7,602 6,626 1,821 1,870 (547) (586) 25,558 23,965 7,207 7,692 207 144 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 14 11 Net income attributable to 3M $5,349 $4,858 * Interest expense, gross is $350 million in 2018 and $322 million in 2017. Selling, general and administrative expenses Research, development and related expenses Gain on sale of businesses Total operating expenses Operating income Other expense, net* Income before income taxes Current assets 3M COMPANY Consolidated Balance Sheets At December 31 (S millions) 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 Current liabilities 2018 2017 $32,765 $31,657 Long-term debt Pension and postretirement benefits Other liabilities Total liabilities 2018 2017 $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 Short-term borrowings and current portion of long-term debt $1,211 Accounts payable Accrued payroll Accrued income taxes Other current liabilities Total current liabilities $1,853 2,266 1,945 749 870 243 310 2,775 2,709 7,244 7.687 13,411 12.096 2,987 3,620 3,010 2,962 $26.652 $26.365
Analysis and Interpretation of Liquidity and Solvency Balance sheets and income statements for 3M Company follow. 3M COMPANY Consolidated Statements of Income For Years Ended December 31 ($ millions) Net sales Operating expenses Cost of sales 16,682 16,055 7,602 6,626 1,821 1,870 (547) (586) 25,558 23,965 7,207 7,692 207 144 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 14 11 Net income attributable to 3M $5,349 $4,858 * Interest expense, gross is $350 million in 2018 and $322 million in 2017. Selling, general and administrative expenses Research, development and related expenses Gain on sale of businesses Total operating expenses Operating income Other expense, net* Income before income taxes Current assets 3M COMPANY Consolidated Balance Sheets At December 31 (S millions) 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 Current liabilities 2018 2017 $32,765 $31,657 Long-term debt Pension and postretirement benefits Other liabilities Total liabilities 2018 2017 $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 Short-term borrowings and current portion of long-term debt $1,211 Accounts payable Accrued payroll Accrued income taxes Other current liabilities Total current liabilities $1,853 2,266 1,945 749 870 243 310 2,775 2,709 7,244 7.687 13,411 12.096 2,987 3,620 3,010 2,962 $26.652 $26.365
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Analysis and Interpretation of Liquidity and Solvency
Balance sheets and income statements for 3M Company follow.
3M COMPANY
Consolidated Statements of Income
For Years Ended December 31 ($ millions)
Net sales
Operating expenses
Cost of sales
Selling, general and administrative expenses
Research, development and related expenses
Gain on sale of businesses
Total operating expenses
16,682 16,055
7,602 6,626
1,821
1,870
(547)
(586)
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
14
11
Net income attributable to 3M
$5,349
$4,858
* Interest expense, gross is $350 million in 2018 and $322 million in 2017.
Current assets
3M COMPANY
Consolidated Balance Sheets
At December 31 ($ millions)
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
Current liabilities
2018 2017
$32,765 $31,657
Long-term debt
Pension and postretirement benefits
Other liabilities
Total liabilities
2018
2017
$2,853 $3,053
380 1,076
5,020
4,911
4,366 4,034
741
937
349
266
13,709
8,738
10,051 10,513
2,657 2,936
1,345 1,395
$36,500 $37,987
14,277
8,866
Short-term borrowings and current portion of long-term debt $1,211
$1,853
Accounts payable
2,266
1,945
Accrued payroll
749
870
Accrued income taxes
243
310
Other current liabilities
2.775 2,709
Total current liabilities
7,244 7,687
13,411
12,096
2,987
3,620
3,010 2,962
$26,652 $26.365
Transcribed Image Text: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
Required
a. Compute the current ratio and quick ratio for 2018 and 2017.
Note: Round your answers to two decimal places (for example, enter 6.78 for 6.77555).
2017
Current ratio
Quick ratio
2018
1.89
1.09 x
Times interest earned
Liabilities-to-equity
1.86
1.04 *
b. Compute times interest earned and liabilities-to-equity ratios for 2018 and 2017.
Note: Round your answers to two decimal places (for example, enter 6.78 for 6.77555).
2018
25.91 X
2.71 ✓
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
2017
33.81 x
2.27
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