(Solution Download) ACC 645: Financial Statement Analysis Fall 2013: Final Exam Solutions The following questions refer.

ACC 645: Financial Statement Analysis Fall 2013: Final Exam Solutions The following questions refer to 3M?s 2012 annual report and other materials that have been distributed. Please show your calculations (if any) clearly. For explanations, be brief and answer to the point. Answer all four questions. No electronic devices other than calculators are allowed. Question 1: This question tests your understanding of the business performance, as reported in the 2012 annual report. No calculations are needed. Answer any two parts: i. In terms of overall sales growth, how did 3M perform during 2011-12 as compared to 2010-11? How did organic sales, acquisitions and translations affect these changes? (From Page 18) 2012 2011 Organic (local currency) 2.6 4.7 Acquisitions 0.8 3.3 Translation -2.4 3.1 Overall sales growth 1.0% 11.1% So relative to 2011, sales growth has slowed down dramatically in 2012. The decrease was caused by translation losses, almost no benefit from acquisitions and even a slow-down in the organic local currency sales. ii. Which were the best and worst business segments on the basis of sales and operating income growth comparing 2011 vs. 2012? What were the driving factors for the changes in these two segments? What products do these two segments manufacture and in which geographic markets did these products show strong and/or weak demand. 2012 2011 (From Page 16) Net Sales Operating Inc. Consumer and Office 3.9% 10.8% Display and Graphics -3.1% -12.1% (From Page 25) Consumer and Office sales grew in 9.5% Latin America, 4% is US and 5% in Asia-Pacific, but declined 2% in EMEA during 2012. Higher profits were due to increases in selling price and decreases in cost of raw materials. (From Page 27) Display and Graphics sales grew in 11% Latin America and 6% is US, but fell 4% in EMEA and 6% in Asia-Pacific during 2012. Lower profits were due to decline in optical and traffic safety systems.


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