Using the Annual Report of your selected company answer the following questions

Question

Using the Annual Report of your selected company answer the following questions in the Discussion: BEST BUY https://finance.yahoo.com/quote/BBY/financials?p=BBY

Using the Annual Report of your selected company answer the following questions in the Discussion:

What is the name of the outside auditing firm for your company?

How long after the company's year-end did the auditor's issue their opinion?

Who bears primary responsibility for maintaining effective internal control over financial reporting? How can you tell?

Does it appear the company has adequate internal control procedures? How can you tell?

By how much did the company's cash balance change from the beginning of the year to the end of the year?

What type of instruments does the company consider to be cash equivalent?

Calculate the cash ratio. How does this ratio compare with the industry?

What is the balance of accounts receivables for the company?

Compute the acid-test ratio. If the current liabilities came due immediately, could the company pay them?

Compute the accounts receivable turnover at year end.

Compute days sales in receivables at year end.

Based on the acid-test ratio, accounts receivable turnover, and days sales in receivables, how does the company compare to the industry?

Explanation / Answer

1. Name of the outside audiiting firm is Deloitte & Touche LLP

2. Opinion was issued on 24th March 2017 whereas the financial statements were made on Jan 18th 2017. so almost after 2 months.

3. The company's managment is primarily responsible for maintaining the adequate internal control as it is defined in n Rule 13a-15(f) under the Exchange Act)

4. Yes, the company has adequate internal control procedures and it was mentioned in the report of indipendent public accounting firm.

5. The cash balance changed by 264 million. The beginning balance was 1976 million and the closing balance was 2240 million.

6. Cash primarily consists of cash on hand and bank deposits. Cash equivalents consist of money market funds, commercial paper, corporate bonds and time deposits with an original maturity of 3 months or less when purchased.

7. Cash ratio = Cash + cash equivalent / Current liabilities

= 2240 / 7122

= 0.315

The industry avarega of cash ratio = 0.30

8. Acid test ratio = Quick assets /Current liabilities

= (total current assets - other assets - inventories) /Current liabilities

= (10516-384-4864) / 7122

= 0.74

No, the company would not be able to pay off it dues immediately. To pay its dues immediately, the company should have the acid test ratio = 1.

9. Balance of Accounts recivables is 1347 million

10. Accounts receivables turnover =Sales / accounts receivables

= 39403/1347

= 29.25

11. Days sales in receivables = 365 days / Accounts receivable turnover

= 365/29.25

= 12.48

12. As compared to the industry, the company is performing well, it isalmost equivalent to the industry average.

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