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. (For all requirements, round your answers to 2 decimal places.)
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