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 28, 2017, are shown below.

Best Buy Co, Inc. Balance Sheet At January 28, 2017 ($ in millions)
Assets
Current assets:
Cash and cash equivalents	$	2,240
Short-term investments		1,681
Accounts receivable (net)		1,347
Inventory		4,864
Other current assets		384
Total current assets		10,516
Long-term assets		3,340
Total assets	$	13,856
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	4,984
Other current liabilities		2,138
Total current liabilities		7,122
Long-term liabilities		2,025
Shareholders’ equity		4,709
Total liabilities and shareholders’ equity	$	13,856

Best Buy Co, Inc. Income Statement For the Year Ended January 28, 2017 ($ in millions)
Revenues	$	39,403
Costs and expenses		37,549
Operating income		1,854
Other income (expense)*		(38	)
Income before income taxes		1,816
Income tax expense		609
Net income	$	1,207

*Includes $72 of interest expense.
  
Required:
1-a. Calculate the current ratio for Best Buy for its fiscal year ended January 28, 2017.
1-b. Calculate the acid-test ratio for Best Buy for its fiscal year ended January 28, 2017.
1-c. Calculate the debt to equity ratio for Best Buy for its fiscal year ended January 28, 2017.
1-d. Calculate the times interest earned ratio for Best Buy for its fiscal year ended January 28, 2017.

(For all requirements, round your answers to 2 decimal places.)

1-a. Current ratio

1-b. Acid-test ratio

1-c. Debt to equity ratio

1-d Times interest earned ratio

Answer 1

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Best Buy
Data provided	2017
Operating income	1,854.00
Less: Other income (expense)	(38.00)
Add: Interest expense	72.00
Income before interest & taxes	1,888.00
Interest expense	72.00
Cash and cash equivalents	2,240.00
Short-term investments	1,681.00
Accounts Receivable (Net)	1,347.00
Inventory	4,864.00
Other current assets	384.00
Total Current Assets	10,516.00
Total Current Liabilities	7,122.00
Long-term liabilities	2,025.00
Total Liabilities	9,147.00
Total Stockholders' Equity	4,709.00
Cash and cash equivalents	2,240.00
Short-term investments	1,681.00
Accounts Receivable (Net)	1,347.00
Quick Assets	5,268.00

Answer a	2017
Ans 1 a- Current Ratio
Current Assets/Current Liabilities	1.48
Ans 1 b- Quick Ratio
Quick Assets/Current Liabilities	0.74
Ans 1 c- Debt to equity ratio
Total Liabilities/ Stockholders' equity	1.94
Ans 1 d- Times interest earned
Income before interest & taxes / Interest Expense	26.22