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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,

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 ($ 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 2 1
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

Balance Sheet ($ millions) Feb. 26, 2011 Feb. 27, 2010
Assets
Cash and cash equivalents $ 1,103 $ 1,826
Short-term investments 22 90
Receivables 2,348 2,020
Merchandise inventories 5,897 5,486
Other current assets 1,103 1,144
Total current assets 10,473 10,566
Property and equipment
Land and buildings 766 757
Leasehold improvements 2,318 2,154
Fixtures and equipment 4,701 4,447
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
Tradenames, Net 133 159
Customer Relationships, Net 203 279
Equity and Other Investments 328 324
Other assets 435 452
Total assets $ 17,849 $ 18,302
Liabilities and Equity
Accounts payable $ 4,894 $ 5,276
Unredeemed giftcard liabilities 474 463
Accrued compensation and related expenses 570 544
Accrued liabilities 1,471 1,681
Accrued income taxes 256 316
Short-term debt 557 663
Current portion of long-term debt 441 35
Total current liabilities 8,663 8,978
Long-term liabilities 1,183 1,256
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 $0.10 par value: Authorized-1.0 billion shares; Issued and outstanding-392,590,000 and 418,815,000 shares, respectively 39 42
Additional paid-in capital 18 441
Retained earnings 6,372 5,797
Accumulated other comprehensive income 173 40
Total Best Buy Co., Inc. shareholders' equity 6,602 6,320
Noncontrolling interests 690 644
Total equity 7,292 6,964
Total liabilities and shareholders' equity $ 17,849 $ 18,302

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 $--
Selling, general and administrative expenses/Revenue 20.5%
Restructuring charges $--
Goodwill and trademark impairment $--
Investment income and other $51
Investment impairment $--
Interest expense $87
Income tax expense/Pretax income 34.4%
Equity in income of affiliates $2
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.

Income Statement, Fiscal Years Ended ($ millions) 2012 Estimated
Revenue Answer

Cost of goods sold Answer

Restructuring charges - cost of goods sold Answer

Gross profit Answer

Selling, general and administrative expenses Answer

Restructuring charges Answer

Goodwill and tradename impairment Answer

Operating income Answer

Other income/expenses
Investment income and other Answer

Interest expense Answer

Earnings before income tax expense and equity in income of affiliates Answer

Income tax expense Answer

Equity in income of affiliates Answer

Net earnings including noncontrolling interests Answer

Net earnings attributable to noncontrolling interests Answer

Net earnings attributable to Best Buy Co., Inc. Answer

Forecast Best Buy's fiscal 2012 balance sheet using the following relations (assume "no change" for accounts not listed). Assume that all capital expenditures are purchases of property and equipment.

Short-term investments No change
Receivables/Revenue 4.7%
Merchandise inventories/Revenue 11.7%
Other current assets/Revenue 2.2%
CAPEX (Increase in gross Property and equipment)/Revenue 1.5%
Goodwill No change
Amortization expense for Tradenames $25
Amortization expense for Customer relationships $38
Equity and Other Investments No change
Other Assets/Revenue 0.9%
Accounts payable/Revenue 9.7%
Unredeemed gift card liabilities/Revenue 0.9%
Accrued compensation and related expenses/Revenue 1.1%
Accrued liabilities/Revenue 2.9%
Accrued income taxes/Revenue 0.5%
Long-term liabilities No change
Noncontrolling interests *
Depreciation/Prior year gross PPE 12.0%
Amortization/Prior year intangible asset balance 18.7%
Dividends/Net income 18.6%
Long-term debt payments required in fiscal 2013 $37
*increase by net income attributable to noncontrolling interests and assume no dividends

  • Round all answers to the nearest whole number.

  • Do not use negative signs with your answers in the balance sheet.

Balance Sheet ($ millions) 2012 Estimated
Assets
Cash and cash equivalents Answer

Short-term investments Answer

Receivables Answer

Merchandise inventories Answer

Other current assets Answer

Total current assets Answer

Property and equipment
Gross property and equipment Answer

Less accumulated depreciation Answer

Net property and equipment Answer

Goodwill Answer

Tradenames, Net Answer

Customer Relationships, Net Answer

Equity and Other Investments Answer

Other assets Answer

Total assets Answer

Liabilities and equity
Accounts payable Answer

Unredeemed gift card liabilities Answer

Accrued compensation and related expenses Answer

Accrued liabilities Answer

Accrued income taxes Answer

Short-term debt Answer

Current portion of long-term debt Answer

Total current liabilities Answer

Long-term liabilities Answer

Long-term debt Answer

Best Buy Co., Inc. Shareholders' Equity
Preferred stock, $1.00 par value: Authorized - 400,000 shares; Issued and outstanding - none Answer

Common stock, $0.10 par value: Authorized - 1.0 billion shares; Issued and outstanding - 392,590,000 and Answer

418,815,000 shares, respectively
Additional paid-in capital Answer

Retained earnings Answer

Accumulated other comprehensive income Answer

Total Best Buy Co., Inc. shareholders' equity Answer

Noncontrolling interests Answer

Total equity Answer

Total liabilities and Equity Answer

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