Compute Measures for DuPont Disaggregation Analysis

Use the information below for 2018 for 3M Company to answer the requirements (perform these computations from the perspective of a 3M shareholder).

($ millions)		2018	2017
Sales		$32,765
Net income, consolidated		5,363
Net income attributable to 3M shareholders		5,349
Assets		36,500	$37,987
Total equity		9,848	11,622
Equity attributable to 3M shareholders		9,796	11,563

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

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?

Asset turnover?

Financial leverage?

c. Compute ROA

d. Compute adjusted ROA (assume a statutory tax rate of 22% and pretax net interest expense of $207). Round answer to two decimal places