The following information relates to Best Buy Company and Circuit City Stores, Inc., for their 2007 and 2006 fiscal years.

Required
a. Compute the following ratios for the companies' 2007 fiscal years:
(1) Current ratio.
(2) Average number of days to sell inventory. (Use average inventory.)
(3) Debt to assets ratio.
(4) Return on investment. (Use average assets and use "earnings from continuing operations" rather than "net earnings.")
(5) Gross margin percentage.
(6) Asset turnover. (Use average assets.)
(7) Return on sales. (Use "earnings from continuing operations" rather than "net earnings.")
(8) Plant assets to long-term debt ratio.
b. Which company appears to be more profitable? Explain your answer and identify which of the ratio(s) from Requirement a you used to reach your conclusion.
c. Which company appears to have the higher level of financial risk? Explain your answer and identify which of the ratio(s) from Requirement a you used to reach your conclusion.
d. Which company appears to be charging higher prices for its goods? Explain your answer and identify which of the ratio(s) from Requirement a you used to reach your conclusion.
e. Which company appears to be the more efficient at using its assets? Explain your answer and identify which of the ratio(s) from Requirement a you used to reach yourconclusion.

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BEST BUY COMPANY Selected Financial Information (Amounts in millions, except per share amounts) March 3, 2007 February 25, 2006 Total current assets Merchandise inventories Property and equipment, net of depreciation Total assets Total current liabilities Total long-term liabilities Total liabilities Total shareholders equity Revenue Cost of goods sold Gross profit Operating income Earnings from continuing operations $9,081 4,028 2,938 13,570 6,301 590 7,369 6,201 35,934 27,165 8,769 1,999 $7,985 3,338 2,712 11,864 6,056 178 6,607 5,257 30,848 23,122 7,726 1,644 before income tax expense Income tax expense Net earnings Basic earnings per share 2,130 752 1,377 $2.86 1,721 581 1,140 S2.33 CIRCUIT CITY STORES Selected Financial Information Amounts in millions except per share data) February 28 February 28, 2006 2007 Total current assets Merchandise inventory Property and equipment, net of depreciation Total assets Total current liabilities Total long-term liabilities Total liabilities Total stockholders equity Revenues Cost of sales, buying and warehousing Gross profit Earnings from continuing operations before $2,884 1,637 921 4,007 1,714 502 2,216 1,791 12,430 9,501 2,928 $2,833 1,698 839 4,069 1,622 492 2,114 1,955 11,598 8,767 2,831 income taxes Provision for income taxes Earnings from continuing operations Net earnings Basic earnings per share 20 31 239 151 140 Continuing operations: ($0.05) $0.79