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Can someone please help me answer the attached question? I am not understanding how to calculate the NNO, NNE, NNEP, FLEV, Spread, or NCI Ratio.
Can someone please help me answer the attached question? I am not understanding how to calculate the NNO, NNE, NNEP, FLEV, Spread, or NCI Ratio. Thanks!
Analysis and Interpretation of Profitability Balance sheets and income statements for Best Buy Co., Inc. follow. Consolidated Statements of Earnings February 26, 2011 For Fiscal Years Ended ($ millions) Revenue February 27, 2010 February 28, 2009 $ 50,272 $ 49,694 $ 45,015 37,611 37,534 34,017 24 -- -- Gross Profit 12,637 12,160 10,998 Selling, general and administrative expenses 10,325 9,873 8,984 198 52 78 -- -- 66 2,114 2,235 1,870 51 54 35 -- -- (111) (87) (94) (94) 2,078 2,195 1,700 714 802 674 2 1 7 1,366 1,394 1,033 (89) (77) (30) $ 1,277 $ 1,317 $ 1,003 Cost of goods sold Restructuring charges - cost of goods sold Restructuring charges Goodwill and tradename impairment Operating income Other income (expense) Investment income and other Investment impairment Interest expense Earnings before income tax expense and equity in income of affiliates Income tax expense Equity in income of affiliates Net earnings including noncontrolling interest Net income attributable to noncontrolling interest Net income attributable to Best Buy Co., Inc. Consolidated Balance Sheets ($ millions, except footnotes) February 26, 2011 February 27, 2010 Assets Current assets $ 1,103 $ 1,826 22 90 Receivables 2,348 2,020 Merchandise inventories 5,897 5,486 Cash and cash equivalents Shortterm investments Consolidated Balance Sheets ($ millions, except footnotes) February 26, 2011 February 27, 2010 1,103 1,144 10,473 10,566 766 757 Leasehold improvements 2,318 2,154 Fixtures and equipment 4,701 4,447 120 95 7,905 7,453 4,082 3,383 Property and equipment, net 3,823 4,070 Goodwill 2,454 2,452 Tradenames, net 133 159 Customer relationships, net 203 279 Equity and other investments 328 324 435 452 $ 17,849 $ 18,302 Liabilities and equity Current liabilities $ 4,894 $ 5,276 Unredeemed gift card liabilities 474 463 Accrued compensation and related expenses 570 544 1,471 1,681 Accrued income taxes 256 316 Shortterm debt 557 663 441 35 Total current liabilities 8,663 8,978 Longterm liabilities 1,183 1,256 711 1,104 Other current assets Total current assets Property and equipment Land and buildings Property under capital lease Less: Accumulated depreciation Other noncurrent assets Total assets Accounts payable Accrued liabilities Current portion of longterm debt Longterm debt Equity Consolidated Balance Sheets ($ millions, except footnotes) Best Buy Co., Inc. Shareholders' equity February 26, 2011 February 27, 2010 Preferred stock, $1.00 par value Common stock, $0.10 par value 39 42 Additional paidin capital 18 441 6,372 5,797 173 40 6,602 6,320 690 644 7,292 6,964 $ 17,849 $ 18,302 Retained earnings Accumulated other comprehensive income (loss) Total Best Buy Co., Inc. shareholders' equity Noncontrolling interest Total equity Total liabilities and equity (a) Compute the following for Best Buy Co. Hint: RNOA is 18.86% and NOPAT is $1,389. Assume that Equity and other investments are operating. Rounding instructions: Do not round until your final answer. Round FLEV and NCI ratio four decimal places. Round Spread and NNEP two decimal places. Remember to use negative signs in answers when appropriate. 2011 NNO = ??? ($millions) 2010 NNO = ??? ($millions) 2011 NNE = ??? ($millions) 2011 NNEP = ??? % 2011 FLEV = ??? 2011 Spread = ??? % 2011 NCI Ratio = ??? (b) Assume that Best Buy Co.'s return on equity (ROE) for 2011 is 19.76% and its return on net operating assets (RNOA) is 18.86%. Confirm computations to yield the relation: ROE = [RNOA + (FLEV X Spread)] X NCI ratio. 2011 ROE = ???% = [???% + (??? * ???%)] *Step by Step Solution
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