Question
Best Buy Co, Inc., is a leading retailer specializing in consumer electronics. A condensed income statement and balance sheet for the fiscal year ended February
Best Buy Co, Inc., is a leading retailer specializing in consumer electronics. A condensed income statement and balance sheet for the fiscal year ended February 1, 2014, are shown below. |
Best Buy Co., Inc. Balance Sheet At February 1, 2014 ($ in millions) | |||
Assets | |||
Current assets: | |||
Cash and cash equivalents | $ | 2,698 | |
Short-term investments | 225 | ||
Accounts receivable, net | 1,318 | ||
Merchandise inventories | 5,378 | ||
Other current assets | 904 | ||
Total current assets | 10,523 | ||
Noncurrent assets | 3,538 | ||
Total assets | $ | 14,061 | |
Liabilities and shareholders' equity | |||
Current liabilities: | |||
Accounts payable | $ | 5,222 | |
Other current liabilities | 2,514 | ||
Total current liabilities | 7,736 | ||
Long-term liabilities | 2,592 | ||
Shareholders equity | 3,733 | ||
Total liabilities and shareholders' equity | $ | 14,061 | |
Best Buy Co., Inc. Income Statement For the Year Ended February 1, 2014 ($ in millions) | |||
Revenues | $ | 42,420 | |
Costs and expenses | 41,272 | ||
Operating income | 1,148 | ||
Other income (expense)* | (55 | ) | |
Income before income taxes | 1,093 | ||
Income tax expense | 428 | ||
Net income | $ | 665 | |
*Includes $118 of interest expense. |
Liquidity and financing ratios for the industry are as follows: |
Industry Average | |||
Current ratio | 1.41 | ||
Acid-test ratio | 0.62 | ||
Debt to equity | 0.72 | ||
Times interest earned | 5.91 | times | |
Required: |
1-a. | Calculate the current ratio for Best Buy for its fiscal year ended February, 1, 2014. (Round your answer to 2 decimal places.) |
1-b. | Calculate the acid-test ratio for Best Buy for its fiscal year ended February, 1, 2014. (Round your answer to 2 decimal places.) |
1-c. | Calculate the debt to equity ratio for Best Buy for its fiscal year ended February, 1, 2014. (Round your answer to 2 decimal places.) |
1-d. | Calculate the times interest earned ratio for Best Buy for its fiscal year ended February, 1, 2014.(Round your answer to 1 decimal place.) |
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