Reading PDFs and write a SPI (Sustainability Performance Interpretation) Paper in ESRM

Question Description

  • Read again each company’s sustainability report to deepen your understanding of their sustainability performance.
  • Review the SPA Data file’s summary statistics: A) mean (represents sustainability performance), B) percent of indicators reported (represents transparency), and C) weighted mean (represents transparent performance).
  • Do an intra-firm (within) comparative analysis. A) How did each company perform in terms of economic, environment, and financial performance (mean)? Did the company have higher (or lower) economic performance compared to environment and financial performance? Higher (or lower) environment performance compared to financial performance? B) How transparent (percent of indicators reported) was each company in terms of economic and environment reporting? Did the company have higher (or lower) economic transparency compared to environment transparency? Note that transparency is not applicable for financial performance because by law all U.S. publicly traded companies must report all on GAAP measures of financial performance. C) How did each company do in terms of economic and environment transparent performance (weighted mean)? Did the company have higher (or lower) economic transparent performance compared to environment transparent performance? Again, transparency is not applicable for financial performance for the reason stated above.
  • Do an inter-firm (among) comparative analysis. A) Did Company 1 have higher (or lower) economic performance compared Company 2 and Company 3? Higher (or lower) environment performance compared Company 2 and Company 3? Higher (or lower) financial performance compared Company 2 and Company 3? B) Did Company 1 have higher (or lower) economic transparency compared Company 2 and Company 3? Higher (or lower) environment transparency compared Company 2 and Company 3? Again, transparency is not applicable for financial performance for the reason stated above. C) Did Company 1 have higher (or lower) economic transparent performance compared Company 2 and Company 3? Higher (or lower) environment transparent performance compared Company 2 and Company 3? Again, transparency is not applicable for financial performance for the reason stated above.
  • Then comparatively rank the case study companies overall, from highest to lowest.
  • Write a paper describing your interpretation findings. A) Organize your paper according to the grading rubric using the organizing template (next page). B) Write a comprehensive and thorough interpretative paper. Provide examples from the sustainability reports, and compare the companies in terms of their summary descriptive statistics in the SPA Data Answer file provided by Dr. Paun after the last SPA quiz. C) Proofread to check spelling, grammar, clarity, and check to make sure that your paper answers all of the grading rubric questions, is not above or too far below the page limitation (see below), and that you have not pasted text from online documents or those written by others.
  • Note that Turnitin will be used to check the SPI paper assignment for plagiarism.
  • Maximum paper length is 8 pages and should be single spaced, .5 inch page margins, with your choice of font type/size. If you want to include citations, figures, or tables, then put those in an appendix (which will not count in the page total). Note that citations, footnotes, figures, and tables are not required. Your paper must be uploaded on Canvas on or before the due date and time.

Unformatted Attachment Preview

Annual Report 2015 Annual Report 2015 To our shareholders 2015 was a fundamentally important year for the future of our enterprise. Our team delivered strong results in a tough external environment, while at the same time taking significant actions to position us for long-term success. Strong Financial Performance In 2015 our team executed well, controlled the controllable and posted efficient growth across our businesses. Companywide, organic local-currency sales growth was 1.3 percent, with positive growth across all geographic areas and in four of our five business groups. Earnings rose to $7.58 per share, a 1.2 percent increase year over year. During the year we completed a corporate restructuring that resulted in a pre-tax charge of $114 million, and will deliver savings of $130 million in 2016. Excluding this charge, we posted earnings per share of $7.72, up 3 percent year-over-year. Net sales were $30 billion, down 5 percent versus 2014. This includes the impact of the stronger U.S. dollar, which reduced sales by nearly 7 percent. Premium margins remain a hallmark of our company, and we are able to deliver such margins even in low-growth economic conditions. Excluding restructuring, we expanded margins nearly a full percentage point to 23.3 percent, with all five business groups above 21 percent. Our relentless focus on operational excellence also led to strong performances related to cash flow and return on invested capital, which are two of our company’s core metrics. In 2015 we delivered a 22.5 percent return on invested capital, coming on top of a 22 percent return in 2014. At the same time, free cash flow conversion was a robust 103 percent, which is our second consecutive year above 100 percent. Our cash flow strength is important because it enables us to consistently deploy capital in a way that creates the greatest value for our customers and shareholders. 1 Inge G. Thulin Chairman of the Board, President and Chief Executive Officer With respect to capital deployment, our first priority is to invest in the business. To that end, in 2015 we invested more than $3 billion in research and development (R&D) and cap-ex, which drive organic growth. Over the last five years, in fact, we’ve invested $16 billion in R&D and cap-ex. Investments in our business also include acquisitions, which complement organic growth. In 2015 we invested nearly $4 billion in acquisitions. After investing in the business, we have a long record of returning cash to our shareholders. And last year we returned nearly $8 billion to shareholders through dividends and share repurchases. 3M has paid dividends uninterrupted for 99 years, and 2015 marked our 57th consecutive year of dividend increases. Building for Long-Term Success In addition to delivering strong financial results, our team made significant progress in positioning us for success in both 2016 and well into the future. At 3M, we run our enterprise with one eye on the microscope and the other eye on the telescope. The microscope view is to ensure we are delivering results day to day, quarter to quarter, and year to year. The telescope view is about strengthening our company for the future. This means we must be nimble in responding to short-term challenges, while at the same time be steadfast in our commitment to investing for long-term success. In 2015 we took action on both fronts. On the microscope view, for example, we completed the corporate restructuring mentioned earlier, which was focused on structural overhead and slower-growing markets, with emphasis on the U.S., Latin America and the Europe/Middle East/ Africa region. This action will help us to navigate the current economic challenges in 2016, with projected pre-tax savings of $130 million. On the telescope view, we made significant progress on our three key levers: Portfolio Management, Investing in Innovation and Business Transformation. These levers are critical enablers to 3M’s success in a future that will be even more competitive and dynamic. Portfolio Management Portfolio management is an ongoing process, and is all about strengthening and focusing our portfolio of businesses. This includes prioritizing the allocation of capital across our portfolio. It also includes combining businesses within 3M, along with acquisitions and divestitures. Last year we consolidated two of our Health Care businesses – dental and orthodontics – into a single oral care solutions business. Now, through a seamless partnership, we can offer our customers a full suite of oral care innovations. Since 2012, in fact, we have realigned from six business groups to five, and from 40 businesses to 26. These actions result in a portfolio of businesses that are more relevant to our customers, have greater scale, are more productive, and can move with even more speed. In 2015 we also strengthened our portfolio through acquisitions. In particular, our Capital Safety acquisition bolsters our already-strong position in the fast-growing personal safety business, and the acquisition of Polypore’s Separations Media business strengthens our filtration technology platform. At the same time, we divested three businesses that no longer aligned with our strategic objectives, including the library systems business. 2 Sales (billions) $35 $29.6 $29.9 Investing in Innovation $30.9 $31.8 $30.3 $30 $25 $20 $15 $10 $5 $0 2011 2012 2013 2014 2015 Cash dividends paid per share $4.50 $2.20 $2.36 $2.54 $3.42 $4.10 $3.00 $2.50 $2.00 The backbone is a global ERP system that we are implementing on a regional basis. Right now we are focused on executing our deployment plan in Europe, and in 2015 we had a number of successful roll-outs, including in the Nordic countries. $1.50 $1.00 $0.50 2011 2012 2013 2014 2015 Earnings per share-diluted $5.96 $6.32 $6.72 $7.49 $7.58 $6.00 $4.00 $2.00 $0.00 Technology conversion will remain a key economic driver into the future, and these investments are strengthening our competitive edge. Business Transformation – our third lever – starts and ends with our customers. It entails transforming our business processes so we can serve customers with greater speed and efficiency around the world. $3.50 $8.00 That is why we continue to invest in R&D, even when the external environment becomes more challenging. In 2015 we invested $1.8 billion in R&D – or 5.8 percent of sales – while expanding our scientific capabilities globally. We opened six customer technical centers around the world, and are opening a new, state-ofthe-art research laboratory in the United States this year. Business Transformation $4.00 $0.00 As a science company, research and development is our heartbeat, and is foundational to our success. It allows us to invent and manufacture cutting-edge products for our customers – which supports organic growth – and helps drive our premium margins and return on invested capital. 2011 2012 2013 2014 2015 Last year we also announced three Global Service Centers, which will optimize our delivery of transactional services. They will also serve as a broader platform for operational efficiencies into the future. Business Transformation is an important undertaking, with significant long-term benefits. We expect our actions to deliver $500-700 million in annual operational savings by 2020, and another $500 million reduction in working capital. In addition to the progress on our levers, last year we invested in a new brand platform – 3M Science. Applied to Life.™ – which is enhancing awareness of how we use science to solve problems for our customers. This will further enhance our reputation, build greater trust and loyalty, and open up new growth opportunities. Also with an eye to the future, we released our new 10-year sustainability goals, which build on our commitment to protect the planet while growing our business. Last year, in fact, marked the 40th anniversary of our Pollution Prevention Pays Program, which has prevented 4 billion pounds of pollution. When I look upon all we accomplished in 2015, it was a fundamentally important year for the future of our enterprise. Because of our work, we are a stronger, more competitive, and more focused company that is positioned to succeed in 2016 and beyond. As always, I thank our shareholders for your confidence, our customers for their partnership, and our global team for their dedication to our success. 3 Inge G. Thulin Chairman of the Board, President and Chief Executive Officer February 11, 2016 Consolidated Statement of Income 3M Company and Subsidiaries Years ended December 31 Dollars in millions 2015 Net sales Operating expenses Cost of sales Selling, general and administrative expenses Research, development and related expenses Total operating expenses Operating income $ 2014 30,274 $ $ Less: Net income attributable to noncontrolling interest 6,823 1,982 4,841 $ 7,026 2,028 4,998 145 (41) 104 $ 42 8 30,871 16,106 6,384 1,715 24,205 6,666 142 (33) 109 149 (26) 123 Income before income taxes Provision for income taxes Net income including noncontrolling interest $ 16,447 6,469 1,770 24,686 7,135 15,383 6,182 1,763 23,328 6,946 Interest expense and income Interest expense Interest income Total interest expense — net 2013 31,821 6,562 1,841 4,721 62 Net income attributable to 3M $ 4,833 $ 4,956 $ 4,659 Weighted average 3M common shares outstanding — basic Earnings per share attributable to 3M common shareholders — basic $ 625.6 7.72 $ 649.2 7.63 $ 681.9 6.83 Weighted average 3M common shares outstanding — diluted Earnings per share attributable to 3M common shareholders — diluted $ 637.2 7.58 $ 662.0 7.49 $ 693.6 6.72 Cash dividends paid per 3M common share $ 4.10 $ 3.42 $ 2.54 Page 51 is intentionally missing from this file. 50 Consolidated Balance Sheet 3M Company and Subsidiaries At December 31 (Dollars in millions, except per share amount) 2015 Assets Current assets Cash and cash equivalents Marketable securities — current Accounts receivable — net of allowances of $91 and $94 Inventories Finished goods Work in process Raw materials and supplies Total inventories Other current assets Total current assets Marketable securities — non-current Investments Property, plant and equipment Less: Accumulated depreciation Property, plant and equipment — net Goodwill Intangible assets — net Prepaid pension benefits Other assets Total assets Liabilities Current liabilities Short-term borrowings and current portion of long-term debt Accounts payable Accrued payroll Accrued income taxes Other current liabilities Total current liabilities $ $ $ Long-term debt Pension and postretirement benefits Other liabilities Total liabilities Commitments and contingencies (Note 14) Equity 3M Company shareholders’ equity: Common stock, par value $.01 per share Shares outstanding - 2015: 609,330,124 Shares outstanding - 2014: 635,134,594 Additional paid-in capital Retained earnings Treasury stock Accumulated other comprehensive income (loss) Total 3M Company shareholders’ equity Noncontrolling interest Total equity Total liabilities and equity 1,798 118 4,154 1,655 1,008 855 3,518 1,398 10,986 9 117 23,098 (14,583) 8,515 9,249 2,601 188 1,053 32,718 2,044 1,694 644 332 2,404 7,118 $ $ $ 1,897 1,439 4,238 1,723 1,081 902 3,706 1,023 12,303 15 102 22,841 (14,352) 8,489 7,050 1,435 46 1,769 31,209 106 1,807 732 435 2,884 5,964 $ 8,753 3,520 1,580 20,971 $ 6,705 3,843 1,555 18,067 $ 9 $ 9 $ $ 52 2014 4,791 36,575 (23,308) (6,359) 11,708 39 11,747 32,718 $ $ 4,379 34,317 (19,307) (6,289) 13,109 33 13,142 31,209 Cisco Systems, Inc. 2015 Annual Report Annual Report 2015 Letters to Shareholders To Our Shareholders, Fiscal 2015 was a great year for Cisco. As we marked our thirtieth anniversary year, we witnessed the inflection point in the next wave of the Internet. This next wave will have five to ten times the impact of the first. As fifty billion devices come online and connect over the next few years, the network and Cisco have never been more relevant or more strategic. In our view, it is clear that the opportunities ahead are even brighter than those of our past. At Cisco, we believe much of our success has come from our ability to lead market transitions. More than five years ago, we saw the impact that connecting people, processes, data, and things would have on organizations and countries. Today, across the board, our customers’ top priority is to use technology to drive growth and productivity, manage risk, and gain competitive advantage. In this digital world, data, and the insights it provides, is our customers’ most strategic asset. It is increasingly distributed across every part of their organization and ecosystem. Their ability to secure, aggregate, automate, and analyze the data, at speed, will ultimately define their success. Customers are adopting entirely new IT architectures and organizational structures to capture this opportunity, and we believe only Cisco, and only the network, can deliver the highly secure, highly distributed, and intelligent infrastructure and solutions required in today’s dynamic, digital world. As we reflect on this past year, we are pleased with how we executed on both our business and financial strategy and how we are innovating what we build and how we go to market to lead our customers in their digital transitions. Revenue for fiscal 2015 increased 4% year over year to a record $49.2 billion. The rapid adoption of our subscriptionbased and software offerings is driving more predictable, recurring revenue streams across the business. We succeeded in driving growth and expanding our margins, while growing our profits more quickly than revenues and generating strong cash flows. We remain highly focused on creating value through ongoing expense management and returning capital to you, our shareholders. For fiscal 2015, our capital returned to shareholders totaled $8.3 billion, comprising $4.2 billion in share buybacks and $4.1 billion in dividends. We are firmly committed to continuing our capital allocation strategy of returning a minimum of 50% of our free cash flow to shareholders annually. A Winning Differentiated Strategy Our strong financial performance and our market leadership in most areas clearly show that our vision and strategy are working. Our differentiation comes from our ability to deliver integrated architectures at scale, with speed and with security. These architectures combine multiple industryleading technologies, services, and software with unique go-to-market models and partnerships. We bring these architectures to market in solutions that deliver business outcomes to our customers. In our view, this architectural approach allows us to deliver value greater than the sum of the parts and is enabling us to pull away from the competition and gain wallet and market share. We believe that an architectural approach is essential when it comes to tackling our customers’ top concern: security. As everything in their world becomes digital, our customers want a player who can step up to be their trusted partner across the board. We believe no one is better positioned than Cisco because, in our view, the only way to protect enterprises is via the network. Our strategy in security is to embed threat-centric security everywhere across the extended network. We are also building a substantial software subscription business in security, based on our Sourcefire technology, with software accounting for 42% of our total security revenue in fiscal 2015. Collaboration is another business that is demonstrating our software progress through strong growth in deferred revenue. Two years since we decided to overhaul our collaboration portfolio with a new generation of products, we achieved year-over-year product deferred revenue growth of over 20% in the fourth quarter, on the strength of our subscription and software-as-a-service businesses. We are seeing even stronger momentum from Meraki, which exited fiscal 2015 with an annualized revenue run rate of approximately $740 million, based on fourth quarter performance, as customers adopt new cloud-based consumption models. In fiscal 2015, we started to see good early traction with our new Cisco ONE Software bundles. We are seeing these offerings drive strategic, multiyear customer relationships with enterprise license agreements, as well as an increase in customer infrastructure spend. We are also seeing the expansion of our total addressable market to encompass data and analytics. Cisco Systems, Inc. 1 Annual Report 2015 Letter to Shareholders Our portfolio of cloud assets, including Sourcefire, Meraki, WebEx, and Cisco Spark, is enabling us to deliver our technology in the ways our customers want to buy it in the future. We intend to take this foundation and replicate it across our entire portfolio. in our current business. Our mergers and acquisitions approach will remain balanced: maintaining discipline in light of market conditions while making key strategic moves that cement our competitive differentiation for the future. Financial Highlights Solid Execution At Cisco, we have always made the tough choices to be positioned for where the market is going and challenged ourselves to reinvent in order to create long-term value for shareholders. Over the past year, we have continued to drive change in our business as we prioritized the elements of our portfolio—cloud, security, collaboration, automation, and analytics—that are driving the most value for our customers. We have made significant changes in our engineering organization to foster cross-functional development, and we have continued the integration of our product and services sales teams into a unified sales force to create a more solutions-centric approach in our go-to-market and partner engagements. We are building more agile, small teams that are working jointly with our customers to develop solutions to help them achieve their business outcomes. During the year, we continued to optimize our portfolio with strategic acquisitions as well as some divestments. To strengthen our security business, we acquired Neohapsis, a provider of security consulting services, and, in the fourth quarter, we announced our intention to acquire OpenDNS, a cloud-based security company. We also expanded our cloud offerings by acquiring Metacloud and Piston Cloud Computing, which will help us build our OpenStack capabilities. Our strategy with Intercloud is to deliver integrated, secure, hybrid cloud solutions to enable our customers to easily consume cloud services on demand. In the fourth quarter, we announced an exclusive agreement to sell the client premises equipment portion of our Service Provider Video business to Technicolor, as we refocus our investments and accelerate our momentum in service provider video toward cloud, security, and software-based services. We plan to continue to build, buy, partner, invest, and co-innovate with our customers in order to seize market transitions in new markets as well as extend our leadership 2 Cisco Systems, Inc. For fiscal 2015, revenue was $49.2 billion, an increase of 4% compared with fiscal 2014, reflecting refreshes across almost every product area and effective resource reallocations to growth areas. Product revenue was $37.8 billion, and service revenue was $11.4 billion, both also increasing 4% year over year. Deferred revenue was $15.2 billion, increasing 7%, due largely to increased software and subscription offerings, which we expect will continue to grow in the overall mix. At the end of the year, recurring revenue accounted for 46% of our product deferred revenue. Net income was $9.0 billion, up 14% from fiscal 2014, while earnings per share on a fully diluted basis were $1.75, up 17% year over year. Our balan ...
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Final Answer


Running head: financial analysis






Financial analysis

3 M had a strong financial performance. The company earned $ 7.58 per every share
registering a 1.2 percent increase in every year. These shares resulted to $7.72 earnings per share
which resulted to 3 percent annually. The company registered an increase of 5 percent of its net
sale from the year 2014. The net sales were $ 30 billion in 2015. 3M expanded its premium
margins by 23.3 percent excluding reconstruction. Its five businesses group had a 21 percent
increase in the premium margins. In addition, the company registered a strong performance in its
return on invested capitals as well as cash flows. The two are the core metrics of the company.
Return on invested capital had an increase of 0.5 percent from 2014. The company also had free
cash flow increasing to 103 percent. This time, the company had free cash flow being over 100
percent consecutively in two years. Cash flow strength of 3M Company is very important for it
helps the company consistently generate capital which improves the value of the company to its
customers as well as its shareholders. The firm has had a strong liquidity position in the two
years hence it is able to meet its current obligations the current ratio in 2014 was 1.2:1 and that
of 2015 was 1.5:1.
3 M had a high economic performance. It has given investments a priority by use of the
capital generated. $3 billion was invested in research as well as development in the year 2015
which has led to organic growth. The company invested $ 16 billion in cap-ex and R&D in the
last five year. These investments have led to high returning cash to shareholders as well as
increased business capital. The company has a record of paying dividends without interruption
for 99 years with an increasing dividend for the past 57 years. Through this, the company had
created a great impact in the economy of the country as well as of its own.
In environmental performance, the company has had recognizable performance. The
company has a goal to protect the planet as it grows its business. In the previous year, the
company marked its 14 anniversary in the campaign of pollution prevention. This program
prevented four billion pounds of pollution a great impact on the environment. The net sales

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