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Use the information below for 2018 for 3M Company to answer the requirements (5 millions) 2018 2017 $32,765 Sales Net income, consolidated 5.363 Net income attributable to 3M shareholders 5.349 207 Pretax interest expense Assets Total equity Equity attributable to 3M shareholders 36.500 $37.987 9,848 11,622 9,796 11,563 a. 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. Denominator ROE Numerator Net income attributable to 3M shareholders Average total equity 5349 $ 9796 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. Numerator Denominator PM 0 01 Asset 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. Numerator Denominator 0 54.6% 0 AT Financial 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. Numerator Denominator

Use the information below for 2018 for 3M Company to answer the requirements (5 millions) 2018 2017 $32,765 Sales Net income, consolidated 5.363 Net income attributable to 3M shareholders 5.349 207 Pretax interest expense Assets Total equity Equity attributable to 3M shareholders 36.500 $37.987 9,848 11,622 9,796 11,563 a. 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. Denominator ROE Numerator Net income attributable to 3M shareholders Average total equity 5349 $ 9796 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. Numerator Denominator PM 0 01 Asset 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. Numerator Denominator 0 54.6% 0 AT Financial 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. Numerator Denominator

FINANCIAL ACCOUNTING
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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Compute Measures for DuPont Disaggregation Analysis Use the information below for 2018 for 3M Company to answer the requirements ($ millions) Sales Net income, consolidated Net income attributable to 3M shareholders Pretax interest expense Assets Total equity Equity attributable to 3M shareholders a. 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. Denominator Numerator Net income attributable to 3M shareholders ◆ Average total equity $ 5349 $ $ $ 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. Denominator $ Numerator $ 2018 2017 $32,765 5,363 5,349 207 36,500 $37,987 9,848 11,622 9,796 11,563 Numerator $ Numerator ◆ Numerator 0 $ Asset 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. Denominator Numerator ◆ 0 $ 0 $ ◆ 9796 ◆ 0 $ Financial 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. ◆ Denominator ◆ 0 0 $ ◆ 0 ◆ 0 c. 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 denominator amounts to compute ROA. Denominator ROE ◆ 0 PM ◆ AT 0 54.6% FL d. Compute adjusted ROA (assume a statutory tax rate of 22% and pretax net interest expense of $207). Perform these computations from a consolidated perspective. Note: 1. Select the appropriate numerator and denominator used to compute adjusted ROA from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute adjusted ROA. Denominator ROA % ROA % %
Transcribed Image Text:Compute Measures for DuPont Disaggregation Analysis Use the information below for 2018 for 3M Company to answer the requirements ($ millions) Sales Net income, consolidated Net income attributable to 3M shareholders Pretax interest expense Assets Total equity Equity attributable to 3M shareholders a. 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. Denominator Numerator Net income attributable to 3M shareholders ◆ Average total equity $ 5349 $ $ $ 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. Denominator $ Numerator $ 2018 2017 $32,765 5,363 5,349 207 36,500 $37,987 9,848 11,622 9,796 11,563 Numerator $ Numerator ◆ Numerator 0 $ Asset 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. Denominator Numerator ◆ 0 $ 0 $ ◆ 9796 ◆ 0 $ Financial 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. ◆ Denominator ◆ 0 0 $ ◆ 0 ◆ 0 c. 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 denominator amounts to compute ROA. Denominator ROE ◆ 0 PM ◆ AT 0 54.6% FL d. Compute adjusted ROA (assume a statutory tax rate of 22% and pretax net interest expense of $207). Perform these computations from a consolidated perspective. 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. Denominator ROA % ROA % %
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