Best Buy Co, Inc., is a leading retailer specializing in consumer electronics. A

Question

Best Buy Co, Inc., is a leading retailer specializing in consumer electronics. A condensed income statement and balance sheet for the fiscal year ended January 30, 2016, are shown below Best Buy Co, Inc. Balance Sheet At January 30, 2016 ($ in millions) Assets Current assets: Cash and cash equivalents Short-term investments Accounts receivable, net Merchandise inventories Other current assets $ 1,976 1,305 1,162 5,051 392 9,886 3,633 $13,519 Total current assets Long-term assets Total assets Liabilities and Shareholders' Equity Current liabilities: Accounts payable $4,450 2,475 6,925 2,216 4,378 Other current liabilities Total current liabilities Long-term liabilities Shareholders' equity

Explanation / Answer

CURRENT RATIO

Current Ratio= CA/CL = 9886/6925 = 1.42

ACID-TEST RATIO

Acid-Test Ratio/Quick Assets Ratio = QA/CL= 4443/4450 = 0.99

DEBT TO EQUITY RATIO

Debt/Long Term Liabilities= 2216

Equity= 4378

Debt/Equity= 0.50

TIMES INTEREST EARNED RATIO

Earnings before interest and tax (EBIT) / Interest expense

= 1375/80

= 17.18.

Current Assets (CA) Amount(millions) Cash and cash equivalents 1976 Short-term investments 1305 Accounts Receivables, net 1162 Other Current Assets 392 Merchandise Inventories 5051 Total Current Assets 9886

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