DIVERSIFIED TECHNOLOGY
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CONSOLIDATED STATEMENT OF INCOME |
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|
2008 |
2007 |
2006 |
|
|
(Millions, except per share amounts) |
$25,269 |
$24,462 |
$22,923 |
|
Net sales |
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|
Operating expenses |
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|
Cost of sales |
13,379 |
12,735 |
11,713 |
|
Selling, general, and administrative expenses |
5,245 |
5,015 |
5,066 |
|
Research, development, and related expenses |
1,404 |
1,368 |
1,522 |
|
(Gain)/loss on sale of business |
23 |
849 |
1,074 |
|
Total |
20,051 |
18,269 |
17,227 |
|
Operating income |
5,218 |
6,193 |
5,696 |
|
Interest expense and income |
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|
Interest expense |
215 |
210 |
122 |
|
Interest income |
105 |
132 |
51 |
|
Total |
110 |
78 |
71 |
|
Income before income taxes and minority interest |
5,108 |
6,115 |
5,625 |
|
Provision for income taxes |
1,588 |
1,964 |
1,723 |
|
Minority interest |
60 |
55 |
51 |
|
Net income |
$3,460 |
$4,096 |
$3,851 |
|
Weighted average common shares outstanding—basic |
699.2 |
718.3 |
747.5 |
|
Earnings per share —basic |
4.95 |
5.7 |
5.15 |
|
Weighted average common shares outstanding—diluted |
707.2 |
732 |
761 |
|
Earnings per share —diluted |
4.89 |
5.6 |
5.06 |
|
Cash dividends paid per common share |
$2.00 |
$1.92 |
$1.84 |
|
CONSOLIDATED BALANCE SHEET |
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|
2008 |
2007 |
|
|
(Dollars in millions, except per share amount) |
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|
Assets |
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|
Current Assets: |
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|
Cash and cash equivalents |
$1,849 |
$1,896 |
|
Marketable securities —current |
373 |
579 |
|
Accounts receivable —net of allowances of $85 and $75 |
3,195 |
3,362 |
|
Inventories |
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|
Finished goods |
1,505 |
1,349 |
|
Work in progress |
851 |
880 |
|
Raw materials and supplies |
657 |
623 |
|
Total inventories |
3,013 |
2,852 |
|
Other current assets |
1,168 |
1,149 |
|
Total current assets |
9,598 |
9,838 |
|
Marketable securities—noncurrent |
352 |
480 |
|
Investments |
286 |
298 |
|
Property, plant, and equipment —net |
18,812 |
18,390 |
|
Less: Accumulated Depreciation |
11,926 |
11,808 |
|
Property, plant, and equipment —net |
6,886 |
6,582 |
|
Goodwill |
5,753 |
4,589 |
|
Intangible assets —net |
1,398 |
801 |
|
Prepaid pension and postretirement benefits |
36 |
1,378 |
|
Other assets |
1,238 |
728 |
|
Total assets |
$25,547 |
$24,694 |
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Liabilities and Stockholders’ Equity |
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|
Current liabilities |
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|
Short term borrowings and current portion of long term debt |
$1,552 |
$901 |
|
Accounts payable |
1,301 |
1,505 |
|
Accrued payroll |
644 |
580 |
|
Accrued income taxes |
350 |
543 |
|
Other current liabilities |
1,992 |
1,833 |
|
Total current liabilities |
5,839 |
5,362 |
|
Long term debt |
5,166 |
4,019 |
|
Pension and postretirement benefits |
2,847 |
1,348 |
|
Other liabilities |
1,816 |
2,218 |
|
Total liabilities |
$15,668 |
$12,947 |
|
Commitments and contingencies (Note 14) |
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|
Stockholders’ equity |
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|
Common stock, par value $.01 per share |
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|
Shares outstanding —2008: 693,543,287 |
9 |
9 |
|
Shares outstanding —2007: 709,156,031 |
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Additional paid in capital |
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|
Retained earnings |
3,001 |
2,785 |
|
Treasury stock |
22,248 |
20,316 |
|
Unearned compensation |
11,676 |
10,520 |
|
Accumulated other comprehensive income (loss) |
57 |
96 |
|
Stockholders’ equity— net |
3,646 |
747 |
|
Total liabilities and stockholders’ equity |
9,879 |
11,747 |
Required
a. Based on these data, calculate the following for 2008 and 2007:
1. Days’ sales in receivables
2. Accounts receivable turnover (gross receivables at year end)
3. Days’ sales in inventory
4. Inventory turnover (use inventory at year end)
5. Working capital
6. Current ratio
7. Acid test ratio
b. Comment on each ratio individually
c. Comment on the apparent total liquidity.