Refer to the balance sheet and income statement information for 3M Company, presented in M5-19 and M5-20.

a. Compute 3M's 2017 return on assets (ROA). Use 35% as the effective tax rate.

b. Disaggregate ROA into profit margin (PM) and asset turnover (AT). Confirm that ROA= PM x AT.

Data from M5-19:

Data from M5-20:

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3M COMPANY AND SUBSIDIARIES December 31 ($ millions) 2017 2016 Assets Cash, cash equivalents and marketable securities $ 4,129 $ 2,678 Accounts receivable-net of allowances of $103 and $88. Total inventories... Prepaids... Other current assets. 4,911 4,034 4,392 3,385 937 821 266 450 Total current assets 14,277 11,726 Property, plant and equipment-net. Goodwill . 8,866 8,516 10,513 9,166 Intangible assets-net Other assets.. 2,936 2,320 1,395 1,178 Total assets $37,987 $32,906 Liabilities and Shareholders' Equity Current liabilities $ 1,853 Short-term borrowings and current portion of long-term debt. Accounts payable.. Accrued payroll.. $4 972 1,945 1,798 870 078 Accrued income taxes Other current liabilities 310 299 2,709 2,472 Total current liabilities. 7,687 6,219 Long-term debt.... Pension and postretirement benefits 12,096 10.678 3,620 2,962 4,018 Other liabilities 1,648 Total liabilities. $26,365 $2,563 Total equity.. $11,622 $10,343 Total liabilities and equity $37,987 $32,906