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Compute and Interpret Measures for DuPont Disaggregation Analysis Use the information below for 3M Company...

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Accounting

Compute and Interpret Measures for DuPont Disaggregation Analysis

Use the information below for 3M Company to answer the requirements (perform these computations from the perspective of a 3M shareholder).

($millions) 2015 2014
Sales $31,718
Net income consolidated 5,787
Net income attributable to 3M shareholders 5,779
Assets 33,395 $31,886
Total equity 11,747 13,142
Equity attributable to 3M shareholders 11,708 13,109

a. Compute return on equity (ROE). Round answer to two decimal places (ex: 0.12345 = 12.35%) Answer%

b. Compute the DuPont model component measures for profit margin, asset turnover, and financial leverage.

  • Round profit margin to two decimal places (ex: 0.12345 = 12.35%)
  • Round asset turnover and financial leverage to three decimal places.

Profit margin Answer% Asset turnover Answer Financial leverage Answer

c. Compute ROA. Round answer to two decimal places (ex: 0.12345 = 12.35%) ROA Answer%

d. Compute adjusted ROA (assume a statutory tax rate of 37% and pretax net interest expense of $123). Round answer to two decimal places (ex: 0.12345 = 12.35%) Answer%

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