Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
Topic Video
Question
Create a comparative financial statement from the following:
Transcribed Image Text:Analysis and Interpretation of Profitability
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.
Operating income.
Other expense, net*
Income before income taxes
Provision for income taxes.
Net income including noncontrolling interest
Less: Net income attributable to noncontrolling interest.
Net income attributable to 3M....
2018
$32,765
16,682
7,602
1,821
(547)
25,558
7,207
207
7,000
1,637
5,363
14
$ 5,349
Interest expense, gross is $350 million in 2018 and $322 million in 2017.
2017
$31,657
16,055
6,626
1,870
(586)
23,965
7,692
144
7,548
2,679
4,869
11
$4,858
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