Question

Forecast the Statement of Cash Flows
Following are the income statements and balance sheets of Best Buy Co., Inc.

Income Statement, Fiscal Years Ended ($ millions)	2012 Estimated	Feb. 26, 2011
Revenue	$53,037	$50,272
Cost of goods sold	39,672	37,611
Restructuring charges - cost of goods sold	--	24
Gross profit	13,365	12,637
Selling, general and administrative expenses	10,873	10,325
Restructuring charges	--	198
Goodwill and tradename impairment	--	--
Operating income	2,492	2,114
Other income (expenses)
Investment income and other	51	51
Interest expense	(87)	(87)
Earnings before income tax expense and equity in income of affiliates	2,456	2,078
Income tax expense	845	714
Equity in income of affiliates	2	2
Net earnings including noncontrolling interests	1,613	1,366
Net earnings attributable to noncontrolling interests	(121)	(89)
Net earnings attributable to Best Buy Co., Inc.	$1,492	$1,277

Balance Sheet ($ millions)	2012 Estimated	Feb. 26, 2011
Assets
Cash and cash equivalents	$1,167	$1,103
Short-term investments	852	22
Receivables	2,493	2,348
Merchandise inventories	6,205	5,897
Other current assets	1,167	1,103
Total current assets	11,884	10,473
Gross property and equipment	8,701	7,905
Less accumulated depreciation	5,031	4,082
Net property and equipment	3,670	3,823
Goodwill	2,454	2,454
Tradenames, Net	108	133
Customer Relationships, Net	165	203
Equity and Other Investments	328	328
Other assets	477	435
Total assets	$ 19,086	$ 17,849
Liabilities and Equity
Accounts payable	$ 5,145	$ 4,894
Unredeemed giftcard liabilities	477	474
Accrued compensation and related expenses	583	570
Accrued liabilities	1,538	1,471
Accrued income taxes	265	256
Short-term debt	557	557
Current portion of long-term debt	37	441
Total current liabilities	8,602	8,663
Long-term liabilities	1,183	1,183
Long-term debt	674	711
Best Buy Co., Inc. Shareholders' Equity
Preferred stock, $ 1.00 par value: Authorized-400,000 shares; Issued and outstanding-none	--	--
Common stock $0.10 par value: Authorized-1.0 billion shares; Issued and outstanding-392,590,000 and 418,815,000 shares, respectively	39	39
Additional paid-in capital	18	18
Retained earnings	7,586	6,372
Accumulated other comprehensive income	173	173
Total Best Buy Co., Inc. shareholders' equity	7,816	6,602
Noncontrolling interests	811	690
Total equity	8,627	7,292
Total liabilities and shareholders' equity	$19,086	$17,849

CAPEX (Increase in gross Property and equipment)/Net sales	1.50%
Depreciation expense/Prior year gross PPE	12.00%
Dividends/Net income	18.60%
Long-term debt payments required in fiscal 2013	$37

Refer to the financial information above for Best Buy Co., Inc. Prepare a forecast of its financial year 2012 statement of cash flows. (Hint: Use net income including noncontrolling interests to begin the statement of cash flows. Use negative signs in answers when appropriate.)

Round all answers to the nearest whole number. Use negative signs with answers, when appropriate.

Best Buy Forecasted Statement of Cash Flows
($ millions)	2012 Estimated
Net income including noncontrolling interests	Answer
Add: depreciation	Answer
Add: amortization	Answer
Change in Accounts receivable	Answer
Change in Inventories	Answer
Change in Other current assets	Answer
Change in Other long-term assets	Answer
Change in Accounts payable	Answer
Change in Unredeemed gift card liabilities	Answer
Change in Accrued compensation and related expenses	Answer
Change in Accrued liabilities	Answer
Change in Accrued income taxes	Answer
Net cash from operating activities	Answer
Capital expenditures	Answer
Increase in Short-term investments	Answer
Net cash from investing activities	Answer
Dividends	Answer
Payments of LT debt	Answer
Net cash from financing activities	Answer
Net change in cash	Answer
Beginning cash	Answer
Ending cash	Answer

Answer 1

Best Buy Forecasted Statement of Cash Flow ($Millions)

	2012 Estimated
Net Income Including Noncontrolling Interest	$1,613
Add: Depreciation	$949
Add: Amotization	$63
Change in Accounts Receivable	$(145)
Change in Inventories	$(308)
Change in other Current Assets	$(64)
Change in other long term Assets	$(42)
Change in Accounts Payable	$251
Change in unredeemed gift card liabilities	$3
Change in Accrued Compensation and Related Expenses	$13
Change in Accrued Liabilities	$67
Change in Accrued Income Taxes	$9
Net Cash from Operating Activities		$2,409
Capital Expenditure ($7,905 - $8,701)	$(796)
Increase in Short Term Investment	$(830)
Net Cash From Investing Activities		$(1,626)
Dividend ($1,492 × 18.60%)	$(277.51)
Payment of LT Debt ($441 -$37 + $37)	$(441)
Net Cash from Financing Activities		$(719)
Net Cash in Cash		$64
Beginning Cash		$1,103
Ending Cash		$1,167