Best Buy Co., Inc.Balance SheetAt January 30, 2016($ in millions)AssetsCurrent assets:Cash and cash equivalents $ 1,976Short-term investments 1,305Accounts receivable, net 1,162Merchandise inventories 5,051Other current assets 392Total current assets 9,886Long-term assets 3,633Total assets $13,519Liabilities and Shareholders’ EquityCurrent liabilities:Accounts payable $ 4,450Other current liabilities 2,475Total current liabilities 6,925Long-term liabilities 2,216Shareholders’ equity 4,378Total liabilities and shareholders’ equity $13,519Best Buy Co., Inc.Income StatementFor the Year Ended January 30, 2016($ in millions)Revenues $ 39,528 Costs and expenses 38,153Operating income 1,375 Other income (expense)* (65)Income before income taxes 1,310 Income tax expense 503Net income $ 807*Includes $80 of interest expense.Liquidity and solvency ratios for the industry are as follows:Industry AverageCurrent ratio 1.23Acid-test ratio 0.60Debt to equity 0.70Times interest earned 5.66 timesRequired:1. Determine the following ratios for Best Buy for its fiscal year ended January 30, 2016.a. Current ratiob. Acid-test ratioc. Debt to equity ratiod. Times interest earned ratio
Best Buy Co., Inc.
Balance Sheet
At January 30, 2016
($ in millions)
Assets
Current assets:
Cash and cash equivalents $ 1,976
Short-term investments 1,305
Accounts receivable, net 1,162
Merchandise inventories 5,051
Other current assets 392
Total current assets 9,886
Long-term assets 3,633
Total assets $13,519
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable $ 4,450
Other current liabilities 2,475
Total current liabilities 6,925
Long-term liabilities 2,216
Shareholders’ equity 4,378
Total liabilities and shareholders’ equity $13,519
Best Buy Co., Inc.
Income Statement
For the Year Ended January 30, 2016
($ in millions)
Revenues $ 39,528
Costs and expenses 38,153
Operating income 1,375
Other income (expense)* (65)
Income before income taxes 1,310
Income tax expense 503
Net income $ 807
*Includes $80 of interest expense.
Liquidity and solvency 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:
1. Determine the following ratios for Best Buy for its fiscal year ended January 30, 2016.
a. Current ratio
b. Acid-test ratio
c. Debt to equity ratio
d. Times interest earned ratio
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