In: Accounting
Analysis and Interpretation of Profitability
Balance sheets and income statements for 3M Company follow.
Consolidated Statements of Income | |||
---|---|---|---|
Years ended December 31 ($ millions) | 2012 | 2011 | 2010 |
Net sales | $29,904 | $ 29,611 | $ 226,662 |
Operating expenses | |||
Cost of sales | 15,685 | 15,693 | 13,831 |
Selling, general and administrative expenses | 6,102 | 6,170 | 5,479 |
Research, development and related expenses | 1,634 | 1,570 | 1,434 |
-- | -- | -- | |
Total operating expenses | 23,421 | 23,433 | 20,744 |
Operating income | 6,483 | 6,178 | 5,918 |
Interest expenses and income | |||
Interest expense | 171 | 186 | 201 |
Interest income | (39) | (39) | (38) |
Total interest expense--net | 132 | 147 | 163 |
Income before income taxes | 6,351 | 6,031 | 5,755 |
Provision for income taxes | 1,840 | 1,674 | 1,592 |
Net income including noncontrolling interest | $4,511 | $4,357 | $4,163 |
Less: Net income attributable to noncontrolling interest | 67 | 74 | 78 |
Net income attributable to 3M | $ 4,444 | $ 4,283 |
$ 4,085 |
Consolidated Balance Sheets | |||
($ millions) | 2012 | 2011 | |
Assets | |||
Current Assets | |||
Cash and cash equivalents | $ 2,883 | $ 2,219 | |
Marketable securities-current | 1,648 | 1,461 | |
Accounts receivable-net of allowances of $105 and $108 | 4,061 | 3,867 | |
Inventories | |||
Finished goods | 1,754 | 1,536 | |
Work in process | 1,186 | 1,061 | |
Raw materials and supplies | 897 | 819 | |
Total inventories | 3,837 | 3,416 | |
Other current assets | 1,201 | 1,277 | |
Total current assets | 13,630 | 12,240 | |
Marketable securities-noncurrent | 1,162 | 896 | |
Investments | 163 | 155 | |
Property, plant and equipment | 22,525 | 21,166 | |
Less: Accumulated depreciation | (14,147) | (13,500) | |
Property, plant and equipment-net | 8,378 | 7,666 | |
Goodwill | 7,385 | 7,047 | |
Intangible assets-net | 1,925 | 1,916 | |
Prepaid pension benefits | 16 | 40 | |
Other assets | 1,217 | 1,656 | |
Total assets | $ 33,876 | $ 31,616 | |
Liabilities | |||
Current liabilities | |||
Short-term borrowings and current portion of long-term debt | $ 1,085 | $ 682 | |
Accounts payable | 1,762 | 1,643 | |
Accrued payroll | 701 | 676 | |
Accrued income taxes | 371 | 355 | |
Other current liabilities | 2,281 | 2,085 | |
Total current liabilities | 6,200 | 5,441 | |
Long-term debt | 4,916 | 4,484 | |
Pension and postretirement benefits | 3,086 | 3.972 | |
Other liabilities | 1,634 | 1,857 | |
Total liabilities | $15,836 | $15,754 | |
Equity | |||
3M Company shareholders' equity | $9 | $9 | |
Additional paid-in capital | 4,044 | 3,767 | |
Retained earnings | 30,679 | 28,348 | |
Treasury stock | (12,407) | (11,679) | |
Accumulated other comprehensive income (loss) | (4,750) | (5,025) | |
Total 3M Company shareholders' equity | 17,575 | 15,420 | |
Noncontrolling interest | 465 | 442 | |
Total equity | $18,040 | $15,862 | |
Total liabilities and equity | $33,876 | $31,616 |
(a) Compute net operating profit after tax (NOPAT) for 2012.
Assume that the combined federal and statutory rate is: 37.0%
(Round your answer to the nearest whole number.)
2012 NOPAT =Answer($ millions)
(b) Compute net operating assets (NOA) for 2012 and 2011. Treat
noncurrent investments as a nonoperating item.
2012 NOA =Answer($ millions)
2011 NOA =Answer($ millions)
(c) Compute 3M's RNOA, net operating profit margin (NOPM) and net
operating asset turnover (NOAT) for 2012. (Round your answers to
two decimal places. Do not round until your final answer. Do not
use NOPM x NOAT to calculate RNOA.)
2012 RNOA =Answer%
2012 NOPM =Answer%
2012 NOAT =Answer
(d) Compute net nonoperating obligations (NNO) for 2012 and
2011.
2012 NNO =Answer($ millions)
2011 NNO =Answer($ millions)