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 30,
Bargain Deal, Inc., is a leading retailer specializing in consumer electronics. A condensed income statement and balance sheet for the fiscal year ended January 30, 2016, are shown below.
Bargain Deal, Inc. Balance Sheet At January 30, 2016 ($ in millions) | |||||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 1,986 | |||
Short-term investments | 1,306 | ||||
Accounts receivable, net | 1,167 | ||||
Merchandise inventories | 5,052 | ||||
Other current assets | 394 | ||||
Total current assets | 9,905 | ||||
Long-term assets | 3,638 | ||||
Total assets | $ | 13,543 | |||
Liabilities and Shareholders' Equity | |||||
Current liabilities: | |||||
Accounts payable | $ | 4,500 | |||
Other current liabilities | 2,575 | ||||
Total current liabilities | 7,075 | ||||
Long-term liabilities | 2,218 | ||||
Shareholders equity | 4,250 | ||||
Total liabilities and shareholders' equity | $ | 13,543 | |||
Bargain Deal, Inc. Income Statement For the Year Ended January 30, 2016 ($ in millions) | |||
Revenues | $ | 39,533 | |
Costs and expenses | 38,154 | ||
Operating income | 1,379 | ||
Other income (expense)* | (66 | ) | |
Income before income taxes | 1,313 | ||
Income tax expense | 518 | ||
Net income | $ | 795 | |
*Includes $89 of interest expense. Required: 1-a. Calculate the current ratio for Bargain Deal for its fiscal year ended January 30, 2016. 1-b. Calculate the acid-test ratio for Bargain Deal for its fiscal year ended January 30, 2016. 1-c. Calculate the debt to equity ratio for Bargain Deal for its fiscal year ended January 30, 2016. 1-d. Calculate the times interest earned ratio for Bargain Deal for its fiscal year ended January 30, 2016.
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