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%

PreviousSave AnswersNext