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 $ 2,156 Short-term investments 1,323 Accounts receivable (net) 1,252 Inventory 5,069 Other current assets 428 Total current assets 10,228 Long-term assets 3,723 Total assets $ 13,951 Liabilities and Shareholders Equity Current liabilities: Accounts payable $ 5,350 Other current liabilities 4,275 Total current liabilities 9,625 Long-term liabilities 2,252 Shareholders equity 2,074 Total liabilities and shareholders equity $ 13,951 Bargain Deal, Inc. Income Statement For the Year Ended January 28, 2017 ($ in millions) Revenues $ 39,618 Costs and expenses 38,171 Operating income 1,447 Other income (expense)* (83 ) Income before income taxes 1,364 Income tax expense 773 Net income $ 591 *Includes $242 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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