Question
Bargain Deal, Inc., is a leading retailer specializing in consumer electronics. A condensed income statement and balance sheet for the fiscal year ended January 28,
Bargain Deal, Inc., is a leading retailer specializing in consumer electronics. A condensed income statement and balance sheet for the fiscal year ended January 28, 2017, are shown below. Bargain Deal, Inc. Balance Sheet At January 28, 2017 ($ in millions) Assets Current assets: Cash and cash equivalents $ 2,076 Short-term investments 1,315 Accounts receivable (net) 1,212 Inventory 5,061 Other current assets 412 Total current assets 10,076 Long-term assets 3,683 Total assets $ 13,759 Liabilities and Shareholders Equity Current liabilities: Accounts payable $ 4,950 Other current liabilities 3,475 Total current liabilities 8,425 Long-term liabilities 2,236 Shareholders equity 3,098 Total liabilities and shareholders equity $ 13,759 Bargain Deal, Inc. Income Statement For the Year Ended January 28, 2017 ($ in millions) Revenues $ 39,578 Costs and expenses 38,163 Operating income 1,415 Other income (expense)* (75 ) Income before income taxes 1,340 Income tax expense 653 Net income $ 687 *Includes $170 of interest expense. Required: 1-a. Calculate the current ratio for Bargain Deal for its fiscal year ended January 28, 2017. 1-b. Calculate the acid-test ratio for Bargain Deal for its fiscal year ended January 28, 2017. 1-c. Calculate the debt to equity ratio for Bargain Deal for its fiscal year ended January 28, 2017. 1-d. Calculate the times interest earned ratio for Bargain Deal for its fiscal year ended January 28, 2017.
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