P 5-1 Best Buy Co., Inc.s consolidated balance sheets from its 2011 annual report are presented
in Exhibit 5-3.
Required
a. Using the balance sheets, prepare a vertical common-size analysis for 2011 and 2010.
Use total assets as a base
b. Using the balance sheets, prepare a horizontal common-size analysis for 2011 and
2010. Use 2010 as the base.
c. Comment on significant trends that appear in (a) and (b).

EXHIBIT 5-3 Best Buy Co., Inc.*

Merchandising Firm

Consolidated Balance Sheets

$ in millions, except per share and share amounts

February 26,

2011

February 27,

2010

ASSETS

Current Assets

Cash and cash equivalents $ 1,103 $ 1,826

Short-term investments 22 90

Receivables 2,348 2,020

Merchandise inventories 5,897 5,486

Other current assets 1,103 1,144

Total current assets 10,473 10,566

Property and Equipment

Land and buildings 766 757

Leasehold improvements 2,318 2,154

Fixtures and equipment 4,701 4,447

Property under capital lease 120 95

7,905 7,453

Less accumulated depreciation 4,082 3,383

Net property and equipment 3,823 4,070

Goodwill 2,454 2,452

Tradenames, Net 133 159

Customer Relationships, Net 203 279

Equity and Other Investments 328 324

Other Assets 435 452

Total Assets $17,849 $18,302

LIABILITIES AND EQUITY

Current Liabilities

Accounts payable $ 4,894 $ 5,276

February 26,

2011

February 27,

2010

Unredeemed gift card liabilities 474 463

Accrued compensation and related expenses 570 544

Accrued liabilities 1,471 1,681

Accrued income taxes 256 316

Short-term debt 557 663

Current portion of long-term debt 441 35

Total current liabilities 8,663 8,978

Long-Term Liabilities 1,183 1,256

Long-Term Debt 711 1,104

Equity

Best Buy Co., Inc. Shareholders Equity

Preferred stock, $1.00 par value: Authorized

400,000 shares; Issued and outstandingnone

Common stock, $0.10 par value: Authorized

1.0 billion shares; Issued and outstanding

392,590,000 and 418,815,000 shares, respectively 39 42

Additional paid-in capital 18 441

Retained earnings 6,372 5,797

Accumulated other comprehensive income 173 40

Total Best Buy Co., Inc. shareholders equity 6,602 6,320

Noncontrolling interests 690 644

Total equity 7,292 6,964

Total Liabilities and Equity $17,849 $18,302

Consolidated Statements of Earnings

$ in millions, except per share amounts

Fiscal Years Ended

February 26,

2011

February 27,

2010

February 28,

2009

Revenue $50,272 $49,694 $45,015

Cost of goods sold 37,611 37,534 34,017

Restructuring charges cost of goods sold 24

Gross profit 12,637 12,160 10,998

Selling, general and administrative expenses 10,325 9,873 8,984

Restructuring charges 198 52 78

Goodwill and tradename impairment 66

Operating income 2,114 2,235 1,870

Other income (expense)

Investment income and other 51 54 35

Investment impairment (111)

Interest expense (87) (94) (94)

Earnings before income tax expense and equity in

income of affiliates 2,078 2,195 1,700

Income tax expense 714 802 674

Equity in income of affiliates 2 1 7

Net earnings including noncontrolling interests 1,366 $ 1,394 $ 1,033

Net earnings attributable to noncontrolling interests (89) (77) (30)

Net earnings attributable to Best Buy Co., Inc. $ 1,277 $ 1,317 $ 1,003

Earnings per share attributable to Best Buy Co., Inc.

Basic $ 3.14 $ 3.16 $ 2.43

Diluted $ 3.08 $ 3.10 $ 2.39

Weighted-average common shares outstanding (in

millions)

Basic 406.1 416.8 412.5

Diluted 416.5 427.5 422.9