Please Answer A, B, C

P3-56. Analysis and Interpretation of Profitability Mondelez International Inc. is one of the world's largest snacks companies, with a brand portfolio that includes: Nabisco, Oreo, Milka, Cadbury and Trident. The company's balance sheets and income state- ments follow. Refer to these financial statements to answer the requirements. MONDELEZ INTERNATIONAL INC. Consolidated Statement of Earnings For the Years Ended December 31 (in millions) 2015 2014 2013 Net revenues $29,636 $34,244 $35,299 Cost of sales. 18,124 21,647 22,189 Gross profit. 11,512 12,597 13,110 Selling, general and administrative expenses 7,577 8,457 8,679 Asset impairment and exit costs.. 901 692 273 Gains on coffee business transactions and divestitures (6,822) (30) Loss on deconsolidation of Venezuela. 778 Amortization of intangibles. 181 206 217 Operating income... 8,897 3,242 3,971 Interest and other expense, net. 1,013 688 1,579 Earnings from continuing operations before income taxes 7.884 2,554 2,392 Provision for income taxes.... 593 353 60 Earnings from continuing operations. 7.291 2,201 2,332 Earnings from discontinued operations, net of income taxes 1,603 Net earnings.. 7,291 2,201 3,935 Noncontrolling interest 24 20 Net earnings attributable to Mondelz International $ 7,267 $ 2,184 $ 3,915 17 2015 2014 $ 1.870 $ 1.631 2,634 3,802 1,212 2,609 MONDELEZ INTERNATIONAL INC. Consolidated Balance Sheets As of December 31 (in millions, expect share data) Assets Cash and cash equivalents Trade receivables (net of allowances of $54 at 2015 and $66 at 2014).. Other receivables (net of allowances of $109 at 2015 and $91 at 2014) Inventories, net. Deferred income taxes.. Other current assets. Total current assets Property, plant and equipment, net Goodwill. Intangible assets, net.. Prepaid pension assets Equity method investments Other assets. Total Assets. 949 3,480 480 1,408 633 8,958 8,362 20,664 18,768 69 5,387 635 11,750 9,827 23,389 20,335 53 662 755 $62,843 $66,771 2015 2014 As of December 31 (in millions, expect share data) Liabilities. Short-term borrowings. Current portion of long-term debt Accounts payable. Accrued marketing Accrued employment costs Other current liabilities Total current liabilities.. Long-term debt Deferred income taxes. Accrued pension costs. Accrued postretirement health care costs. Other liabilities Total liabilities Equity Common stock, no par value (1,996,537,778 shares issued at 2015 and 2014). Additional paid-in capital Retained earnings Accumulated other comprehensive losses Treasury stock, at cost. Total Mondelz International shareholders' equity. Noncontrolling interest Total equity.. Total liabilties and equity. $ 236 605 4,890 1,634 844 2,713 10,922 14,557 4,750 2,183 499 1,832 $34,743 $ 1,305 1,530 5,299 2,047 946 2,880 14,007 13,821 5,512 2,912 526 2,140 $38,918 31,760 20,700 (9,986) (14,462) 28,012 88 28,100 $62,843 31,651 14,529 (7,318) (11,112) 27.750 103 27,853 $66,771 P3-57. Direct Computation of Nonoperating Return Refer to the financial information of Mondelez International Inc. in P3-56 to answer the following requirements. Required a. Assume that 2015 net nonoperating expenses (NNE) are $638 million and that NOA is $41,628 mil- lion and $42,878 million in 2015 and 2014, respectively. Compute financial leverage (FLEV) and Spread for 2015 b. Compute the 2015 return on equity. The NCI ratio for 2015 is 0.999. Confirm computations to yield the relation: ROE = [RNOA + (FLEV X Spread)] X NCI ratio. c. What do your computations of the nonoperating return in parts a and b imply about the company's use of borrowed funds? P3-56. Analysis and Interpretation of Profitability Mondelez International Inc. is one of the world's largest snacks companies, with a brand portfolio that includes: Nabisco, Oreo, Milka, Cadbury and Trident. The company's balance sheets and income state- ments follow. Refer to these financial statements to answer the requirements. MONDELEZ INTERNATIONAL INC. Consolidated Statement of Earnings For the Years Ended December 31 (in millions) 2015 2014 2013 Net revenues $29,636 $34,244 $35,299 Cost of sales. 18,124 21,647 22,189 Gross profit. 11,512 12,597 13,110 Selling, general and administrative expenses 7,577 8,457 8,679 Asset impairment and exit costs.. 901 692 273 Gains on coffee business transactions and divestitures (6,822) (30) Loss on deconsolidation of Venezuela. 778 Amortization of intangibles. 181 206 217 Operating income... 8,897 3,242 3,971 Interest and other expense, net. 1,013 688 1,579 Earnings from continuing operations before income taxes 7.884 2,554 2,392 Provision for income taxes.... 593 353 60 Earnings from continuing operations. 7.291 2,201 2,332 Earnings from discontinued operations, net of income taxes 1,603 Net earnings.. 7,291 2,201 3,935 Noncontrolling interest 24 20 Net earnings attributable to Mondelz International $ 7,267 $ 2,184 $ 3,915 17 2015 2014 $ 1.870 $ 1.631 2,634 3,802 1,212 2,609 MONDELEZ INTERNATIONAL INC. Consolidated Balance Sheets As of December 31 (in millions, expect share data) Assets Cash and cash equivalents Trade receivables (net of allowances of $54 at 2015 and $66 at 2014).. Other receivables (net of allowances of $109 at 2015 and $91 at 2014) Inventories, net. Deferred income taxes.. Other current assets. Total current assets Property, plant and equipment, net Goodwill. Intangible assets, net.. Prepaid pension assets Equity method investments Other assets. Total Assets. 949 3,480 480 1,408 633 8,958 8,362 20,664 18,768 69 5,387 635 11,750 9,827 23,389 20,335 53 662 755 $62,843 $66,771 2015 2014 As of December 31 (in millions, expect share data) Liabilities. Short-term borrowings. Current portion of long-term debt Accounts payable. Accrued marketing Accrued employment costs Other current liabilities Total current liabilities.. Long-term debt Deferred income taxes. Accrued pension costs. Accrued postretirement health care costs. Other liabilities Total liabilities Equity Common stock, no par value (1,996,537,778 shares issued at 2015 and 2014). Additional paid-in capital Retained earnings Accumulated other comprehensive losses Treasury stock, at cost. Total Mondelz International shareholders' equity. Noncontrolling interest Total equity.. Total liabilties and equity. $ 236 605 4,890 1,634 844 2,713 10,922 14,557 4,750 2,183 499 1,832 $34,743 $ 1,305 1,530 5,299 2,047 946 2,880 14,007 13,821 5,512 2,912 526 2,140 $38,918 31,760 20,700 (9,986) (14,462) 28,012 88 28,100 $62,843 31,651 14,529 (7,318) (11,112) 27.750 103 27,853 $66,771 P3-57. Direct Computation of Nonoperating Return Refer to the financial information of Mondelez International Inc. in P3-56 to answer the following requirements. Required a. Assume that 2015 net nonoperating expenses (NNE) are $638 million and that NOA is $41,628 mil- lion and $42,878 million in 2015 and 2014, respectively. Compute financial leverage (FLEV) and Spread for 2015 b. Compute the 2015 return on equity. The NCI ratio for 2015 is 0.999. Confirm computations to yield the relation: ROE = [RNOA + (FLEV X Spread)] X NCI ratio. c. What do your computations of the nonoperating return in parts a and b imply about the company's use of borrowed funds