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 | $ | 2,136 | |
Short-term investments | 1,321 | ||
Accounts receivable (net) | 1,242 | ||
Inventory | 5,067 | ||
Other current assets | 424 | ||
Total current assets | 10,190 | ||
Long-term assets | 3,713 | ||
Total assets | $ | 13,903 | |
Liabilities and Shareholders Equity | |||
Current liabilities: | |||
Accounts payable | $ | 5,250 | |
Other current liabilities | 4,075 | ||
Total current liabilities | 9,325 | ||
Long-term liabilities | 2,248 | ||
Shareholders equity | 2,330 | ||
Total liabilities and shareholders equity | $ | 13,903 | |
Bargain Deal, Inc. Income Statement For the Year Ended January 28, 2017 ($ in millions) | |||
Revenues | $ | 39,608 | |
Costs and expenses | 38,169 | ||
Operating income | 1,439 | ||
Other income (expense)* | (81 | ) | |
Income before income taxes | 1,358 | ||
Income tax expense | 743 | ||
Net income | $ | 615 | |
*Includes $224 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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