Financial Management Average Collection Period Ratio Analysis Paper
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Best Buy Co., Inc.
Income Statement
| 2/3/2018 | 1/28/2017 | 1/30/2016 | 1/31/2015 | |
| Revenue | ||||
| Total Revenue | 42,151,000 | 39,403,000 | 39,528,000 | 40,339,000 |
| Cost of Revenue | 32,275,000 | 29,963,000 | 30,334,000 | 31,292,000 |
| Gross Profit | 9,876,000 | 9,440,000 | 9,194,000 | 9,047,000 |
| Operating Expenses | ||||
| Selling General and Administrative | 7,911,000 | 7,493,000 | 7,612,000 | 7,550,000 |
| Operating Income or Loss | 1,965,000 | 1,947,000 | 1,582,000 | 1,497,000 |
| Income from Continuing Operations | ||||
| Add Total Other Income/Expenses Net | -148,000 | -131,000 | -272,000 | -110,000 |
| Interest Expense | 75,000 | 72,000 | 80,000 | 90,000 |
| Income Before Tax | 1,742,000 | 1,744,000 | 1,230,000 | 1,297,000 |
| Income Tax Expense | 818,000 | 609,000 | 503,000 | 141,000 |
| Add Discontinued Operations | 1,000 | 21,000 | 90,000 | -13,000 |
| Net Income | 925,000 | 1,156,000 | 817,000 | 1,143,000 |
Best Buy Co., Inc.
Balance Sheet
| 2/3/2018 | 1/28/2017 | 1/30/2016 | 1/31/2015 | |
| Current Assets | ||||
| Cash And Cash Equivalents | 1,101,000 | 2,240,000 | 1,976,000 | 2,432,000 |
| Short Term Investments | 2,196,000 | 1,848,000 | 1,384,000 | 1,539,000 |
| Net Receivables | 1,049,000 | 1,347,000 | 1,162,000 | 1,280,000 |
| Inventory | 5,209,000 | 4,864,000 | 5,051,000 | 5,174,000 |
| Other Current Assets | 274,000 | 217,000 | 313,000 | 1,047,000 |
| Total Current Assets | 9,829,000 | 10,516,000 | 9,886,000 | 11,472,000 |
| Long Term Investments | 0 | 13,000 | 27,000 | 3,000 |
| Property Plant and Equipment | 2,421,000 | 2,293,000 | 2,346,000 | 2,295,000 |
| Goodwill | 425,000 | 425,000 | 425,000 | 425,000 |
| Intangible Assets | 18,000 | 18,000 | 18,000 | 57,000 |
| Other Assets | 356,000 | 591,000 | 817,000 | 993,000 |
| Deferred Long Term Asset Charges | 159,000 | 317,000 | 510,000 | 574,000 |
| Total Assets | 13,049,000 | 13,856,000 | 13,519,000 | 15,245,000 |
| Current Liabilities | ||||
| Accounts Payable | 4,873,000 | 4,984,000 | 4,450,000 | 5,030,000 |
| Short/Current Long Term Debt | 499,000 | 0 | 350,000 | 0 |
| Other Current Liabilities | 1,043,000 | 944,000 | 975,000 | 1,609,000 |
| Total Current Liabilities | 7,817,000 | 7,122,000 | 6,925,000 | 7,777,000 |
| Long Term Debt | 648,000 | 1,158,000 | 1,168,000 | 1,492,000 |
| Other Liabilities | 805,000 | 704,000 | 877,000 | 901,000 |
| Total Liabilities | 9,437,000 | 9,147,000 | 9,141,000 | 10,250,000 |
| Stockholders’ Equity | ||||
| Total Stockholder Equity | 3,612,000 | 4,709,000 | 4,378,000 | 4,995,000 |
Using the attached financial statements for Best Buy Co., Inc. complete the financial statement analysis and ratio analysis by answering the questions below.
a. Calculate average collection period, total asset turnover, inventory turnover, and days in inventory.
b. Assess the activity of the firm, using your calculations in part a, over the four year period.
c. Calculate the gross profit margin, operating margin, and net profit margin.
d. Assess the profitability of the firm, using your calculations in part c, over the four year period.
Requirements:
- Submit your paper in a Word document, showing all of your calculations (attach Excel File if necessary).
- Use terms, evidence, and concepts from class readings.
- Your paper must be formatted according to the CSU Global Writing Center.
The exercise should be 3-4 pages (not including title or reference pages), double spaced, follow the CSU Global Writing Center, and include a minimum of four (4) sources with at least 2 from scholarly or peer review journals. See the Module 2 Critical Thinking Rubric for full details on how you will be graded on this assignment.
