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Please show/explain work. Thank You. Best Buy Co, Inc., is a leading retailer specializing in consumer electronics. A condensed income statement balance sheet for the
Please show/explain work. Thank You.
Best Buy Co, Inc., is a leading retailer specializing in consumer electronics. A condensed income statement balance sheet for the fiscal year ended February 1, 2014, are shown below. Calculating ratios; Best Buy Best Buy Co., Inc. Balance Sheet At February 1, 2014 ($ in millions) Assets Current assets: Cash and cash equivalents $ 2, 678 Short-term investments 223 Accounts receivable, net 1, 308 Merchandise inventories 5, 376 Other current assets 900 Total current assets 10, 485 Noncurrent assets 3, 528 Total assets $14, 013 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 5, 122 Other current liabilities 2, 314 Total current liabilities 7, 436 Long-term liabilities 2, 588 Shareholders' equity 3, 989 Total liabilities and shareholders' equity $ 14, 013 Best Buy Co., Inc. Income Statement For the Year Ended February 1, 2014 ($ in millions) Revenues $42, 410 Costs and expenses 41, 270 Operating income 1, 140 Other income (expense)* (53) Income before income taxes 1, 087 Income tax expense 398 Net income $ 689 *Includes $100 of interest expense Liquidity and financing ratios for the industry are as follows: Industry Average Current ratio 1.23 Acid-test ratio 0.60 Debt to equity 0.70 Times interest earned 5.66 times Required: Determine the following ratios for Best Buy for its fiscal year ended February, 1, 2014: Current ratio Acid-test ratio Debt to equity ratio Times interest earned ratio Using the ratios from requirement 1, assess Best Buy's liquidity and solvency relative to its industryStep by Step Solution
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