Best Buy Corporation

COMPARATIVE BALANCE SHEET

AS OF DECEMBER 31, 2017 AND 2018

2018 2017 2018 2017

Cash $1,800 $1,100 Accounts payable $1,200 $ 800

Receivables 1,750 1,300 Accrued liabilities 200 250

Inventory 1,600 1,900 Total Current Liabilities 1,400 1,050

Total Current Assets 5,150 4,300 Bonds payable 1,400 1,650

Plant assets 3,200 3,170 Capital stock 1,900 1,700

Accu. Depreciation (1,200) (1,170) Retained earnings 2,450 1,900

Net Plant Assets 2,000 2,000 Total stockholders Equity 4,350 3,600

Total Assets $7,150 $6,300 Total Liabilities & Equity $ 7,150 $ 6,300

Best Buy Corporation

INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31, 2018

Sales $6,900

Cost of goods sold (4,700)

Gross Margin 2,200

Selling and Administrative Expense (750)

Income from operations 1,450

Financing Cost (100)

Income before Tax 1,350

Income tax (540)

Net Income $ 810

Required:

1. Calculate Cash flows generated from assets and Cash flows used for investors payment
2. Assume sales revenue is expected to grow at 15% in 2019. Calculate External Financing Needed assuming percentage of sales approach. What financing strategy the company should take while using plug variables to maintain same debt to equity ratio as of 2018?