Analyzing, Forecasting, and Interpreting Both Income Statement and Balance Sheet Following are the income statements and balance sheets of Best Buy Co., Inc. Income Statement, Fiscal Years Ended (5 millions) Feb. 26, 2011 Feb. 27, 2010 Revenue $ 50,272 $ 49,694 Cost of goods sold 37,611 37,534 Restructuring charges - cost of goods sold 24 Gross profit 12,637 12,160 Selling, general and administrative expenses 10,325 9,873 Restructuring charges 198 52 Goodwill and tradename impairment Operating income 2,114 2,235 Other income (expenses) Investment income and other 51 54 Interest expense 87 94 Earnings before income tax expense and equity in income of affiliates 2,078 2,195 Income tax expense 714 802 Equity in income of affiliates Net earnings including noncontrolling interests 1,366 1,394 Net (earnings) attributable to noncontrolling interests 89 77 Net earnings attributable to Best Buy Co., Inc. $ 1,277 $1,317 2 1 Balance Sheet (5 millions) Feb, 26, 2011 Feb. 27, 2010 Assets Cash and cash equivalents 5 1.103 $ 1.826 Short-term investments 22 90 Receivables 2.348 2,020 Merchandise inventories 5,897 5486 Other current assets 1.103 1,144 Total current assets 10,473 10,566 Property and equipment Land and building 766 757 Leasehold improvements 2.318 2,154 Fixtures and equipment 4,701 4.442 Property under capital lease 120 95 Gross property and equipment 7.905 7.453 Less accumulated depreciation 4,082 3,383 Net property and equipment 3,823 4,070 Goodwill 2.454 2.452 Traderames Net 133 159 Customer Relationships. Net 203 279 Equity and other investments 328 324 Other assets 435 452 Total assets 5 17,849 5 18.302 Liabilities and Equity Accounts payable $4894 55,276 Unredeemed giftcard liabilities 474 463 Accrued compensation and related expenses 570 544 Accrued liabilities 1471 1,681 Accrued income taxes 256 316 Short-term debe 557 663 Current portion of long-term debt 441 Total current liabilities 8.663 3.978 Long-term abilities 1.183 1.250 Long-term debt 711 1.104 Best Buy Co. Inc. Shareholders' Equity Preferred stock $ 1.00 par value: Authorized 400,000 shares: Issued and outstanding none Common stock 50.10 par value: Authorized 10 billion shares Issued and outstanding 292,590,000 and 418,815,000 shares, respectively 39 42 Additional paldin capital 18 441 Retained earnings 6,372 5,797 123 40 Accumulated other comprehensive income 6,602 Total Best Buy Co. Inc. shareholders' equity ad 690 Noncontrolling interests 7.292 6,964 Total equity Total liabilities and shareholders equity 517,849 STO Forecast Best Buy's fiscal 2012 income statement using the following relations (assume "no change" for accounts not listed). Revenue growth 6% Cost of good sold/Revenue 74.8% Restructuring charges - cost of good sold S. Selling general and administrative expenses/Revenue 20.5% Restructuring charges $ Goodwill and trademark impairment 5 Investment income and other 551 Investment impairment $ Interest expense $87 Income tax expense/Pretax income 34.495 Equity in income of affiliates 52 Net earnings attributable to noncontrolling interests/Net earnings including noncontrolling interests 6.5% Round all answers to the nearest whole number. Do not use negative signs with your answers in the income statement. 2012 Estimated 53,288 39,859 0 13,429 10,924 0 0 2,505 Income Statement, Fiscal Years Ended (5 millions) Revenue Cost of goods sold Restructuring charges cost of goods sold Gross profit Selling, general and administrative expenses Restructuring charges Goodwill and tradename Impairment Operating income Other income/expenses Investment income and other Interest expense Earnings before income tax expense and equity in income of affiliates Income tax expense Equity in income of affiliates Net earnings including noncontrolling interests Net earnings attributable to noncontrolling interests Net earnings attributable to Best Buy Co., Inc. 51 87 2,469 849 2 1,622 105 1,517 Forecast Best Buys fiscal 2012 balance sheet using the following relations baseme no changer for accounts not listed. Assume that all capital expenditures are purchases of property and equipment Shorts och Hemahlen 419 Merchandise inventaries Other relevue CAPOnce Property and equipment Goodwill NO antionpense for dennes Asation pense for Customer with Cully and investment No change Derevenue Accounts payable 97 Unredereed gere Accrued computation and related Acred San 2. Acord income tax venue Long NO Nonning Depwater year gas PPE 12.07 17 Amor Prior yang beban 10 Divendet cong-term payments required in Focal 2017 increase income table to noncontrolling interests and the identi Round all answers to the nearest whole number Do not use negative signs with your answers in the balance sheet Balance Sheet (5 min 2012 Estimated 1 Ats Chand cash Sement 1.127 22 Landhe me Det talent mit andet 1.17 0473 Balance Sheet 2012 (5 millions) Estimated Assets Cash and cash equivalents 5 1.127 x Short-term investments 22 Receivables 2.505 Merchandise inventories 6.235 Other current assets 1,172 Total current assets 10,473 x Property and equipment Gross property and equipment 8,704 Less accumulated depreciation 5,031 Net property and equipment 3,673 Goodwill 2.454 Tradenames, Net 108 Customer Relationships. Net 165 Equity and Other Investments 328 Other assets 480 Total assets 5 OX Liabilities and equity Accounts payable 5 5.169 Unredeemed gift card abilities 480 Accrued compensation and related expenses 586 Accrued liabilities 1.545 Accrued income taxes 266 Short-term debt 557 Current portion of long-term debt 37 Total current liabilities 8,640 Long-term liabilities 7.183 Long-term debt 674 Best Buy Co., Inc. Shareholders' Equity Preferred stock, 51.00 par value: Authorized - 400,000 shares: Issued and outstanding none 0 Common stock, 50.10 par value: Authorized - 1.0 billion shares; Issued and outstanding - 392,590,000 and 39 418,815,000 shares, respectively Additional paid in capital 18 Retained earnings OX Accumulated other comprehensive income 173 Total Best Buy Co., Inc. shareholders equity 0 Noincontrolling interests OX Total equity Total liabilities and Equity OX OX Analyzing, Forecasting, and Interpreting Both Income Statement and Balance Sheet Following are the income statements and balance sheets of Best Buy Co., Inc. Income Statement, Fiscal Years Ended (5 millions) Feb. 26, 2011 Feb. 27, 2010 Revenue $ 50,272 $ 49,694 Cost of goods sold 37,611 37,534 Restructuring charges - cost of goods sold 24 Gross profit 12,637 12,160 Selling, general and administrative expenses 10,325 9,873 Restructuring charges 198 52 Goodwill and tradename impairment Operating income 2,114 2,235 Other income (expenses) Investment income and other 51 54 Interest expense 87 94 Earnings before income tax expense and equity in income of affiliates 2,078 2,195 Income tax expense 714 802 Equity in income of affiliates Net earnings including noncontrolling interests 1,366 1,394 Net (earnings) attributable to noncontrolling interests 89 77 Net earnings attributable to Best Buy Co., Inc. $ 1,277 $1,317 2 1 Balance Sheet (5 millions) Feb, 26, 2011 Feb. 27, 2010 Assets Cash and cash equivalents 5 1.103 $ 1.826 Short-term investments 22 90 Receivables 2.348 2,020 Merchandise inventories 5,897 5486 Other current assets 1.103 1,144 Total current assets 10,473 10,566 Property and equipment Land and building 766 757 Leasehold improvements 2.318 2,154 Fixtures and equipment 4,701 4.442 Property under capital lease 120 95 Gross property and equipment 7.905 7.453 Less accumulated depreciation 4,082 3,383 Net property and equipment 3,823 4,070 Goodwill 2.454 2.452 Traderames Net 133 159 Customer Relationships. Net 203 279 Equity and other investments 328 324 Other assets 435 452 Total assets 5 17,849 5 18.302 Liabilities and Equity Accounts payable $4894 55,276 Unredeemed giftcard liabilities 474 463 Accrued compensation and related expenses 570 544 Accrued liabilities 1471 1,681 Accrued income taxes 256 316 Short-term debe 557 663 Current portion of long-term debt 441 Total current liabilities 8.663 3.978 Long-term abilities 1.183 1.250 Long-term debt 711 1.104 Best Buy Co. Inc. Shareholders' Equity Preferred stock $ 1.00 par value: Authorized 400,000 shares: Issued and outstanding none Common stock 50.10 par value: Authorized 10 billion shares Issued and outstanding 292,590,000 and 418,815,000 shares, respectively 39 42 Additional paldin capital 18 441 Retained earnings 6,372 5,797 123 40 Accumulated other comprehensive income 6,602 Total Best Buy Co. Inc. shareholders' equity ad 690 Noncontrolling interests 7.292 6,964 Total equity Total liabilities and shareholders equity 517,849 STO Forecast Best Buy's fiscal 2012 income statement using the following relations (assume "no change" for accounts not listed). Revenue growth 6% Cost of good sold/Revenue 74.8% Restructuring charges - cost of good sold S. Selling general and administrative expenses/Revenue 20.5% Restructuring charges $ Goodwill and trademark impairment 5 Investment income and other 551 Investment impairment $ Interest expense $87 Income tax expense/Pretax income 34.495 Equity in income of affiliates 52 Net earnings attributable to noncontrolling interests/Net earnings including noncontrolling interests 6.5% Round all answers to the nearest whole number. Do not use negative signs with your answers in the income statement. 2012 Estimated 53,288 39,859 0 13,429 10,924 0 0 2,505 Income Statement, Fiscal Years Ended (5 millions) Revenue Cost of goods sold Restructuring charges cost of goods sold Gross profit Selling, general and administrative expenses Restructuring charges Goodwill and tradename Impairment Operating income Other income/expenses Investment income and other Interest expense Earnings before income tax expense and equity in income of affiliates Income tax expense Equity in income of affiliates Net earnings including noncontrolling interests Net earnings attributable to noncontrolling interests Net earnings attributable to Best Buy Co., Inc. 51 87 2,469 849 2 1,622 105 1,517 Forecast Best Buys fiscal 2012 balance sheet using the following relations baseme no changer for accounts not listed. Assume that all capital expenditures are purchases of property and equipment Shorts och Hemahlen 419 Merchandise inventaries Other relevue CAPOnce Property and equipment Goodwill NO antionpense for dennes Asation pense for Customer with Cully and investment No change Derevenue Accounts payable 97 Unredereed gere Accrued computation and related Acred San 2. Acord income tax venue Long NO Nonning Depwater year gas PPE 12.07 17 Amor Prior yang beban 10 Divendet cong-term payments required in Focal 2017 increase income table to noncontrolling interests and the identi Round all answers to the nearest whole number Do not use negative signs with your answers in the balance sheet Balance Sheet (5 min 2012 Estimated 1 Ats Chand cash Sement 1.127 22 Landhe me Det talent mit andet 1.17 0473 Balance Sheet 2012 (5 millions) Estimated Assets Cash and cash equivalents 5 1.127 x Short-term investments 22 Receivables 2.505 Merchandise inventories 6.235 Other current assets 1,172 Total current assets 10,473 x Property and equipment Gross property and equipment 8,704 Less accumulated depreciation 5,031 Net property and equipment 3,673 Goodwill 2.454 Tradenames, Net 108 Customer Relationships. Net 165 Equity and Other Investments 328 Other assets 480 Total assets 5 OX Liabilities and equity Accounts payable 5 5.169 Unredeemed gift card abilities 480 Accrued compensation and related expenses 586 Accrued liabilities 1.545 Accrued income taxes 266 Short-term debt 557 Current portion of long-term debt 37 Total current liabilities 8,640 Long-term liabilities 7.183 Long-term debt 674 Best Buy Co., Inc. Shareholders' Equity Preferred stock, 51.00 par value: Authorized - 400,000 shares: Issued and outstanding none 0 Common stock, 50.10 par value: Authorized - 1.0 billion shares; Issued and outstanding - 392,590,000 and 39 418,815,000 shares, respectively Additional paid in capital 18 Retained earnings OX Accumulated other comprehensive income 173 Total Best Buy Co., Inc. shareholders equity 0 Noincontrolling interests OX Total equity Total liabilities and Equity OX OX