Key figures for the recent two years of both Best Buy and RadioShack follow.

Required
1. Compute profit margins for
(a) Best Buy
(b) RadioShack for the two years of data shown.
2. Which company is more successful on the basis of profit margin? Explain.
3. Compute the current ratio for both years and both companies.
4. Which company has the better ability to pay short-term obligations according to the current ratio?
5. Analyze and comment on each company€™s current ratios for the past two years.
6. How do Best Buy€™s and RadioShack€™s current ratios compare to their industry average ratio of 1.3?

Transcribed Image Text:

Best Buy RadioShack Current Year Prior Year Current Year Prior Year (S millions) Net income . . . . Net sales.. Current assets . _ . Current liabilities $1,003 45,015 8,192 8,435 $ 1,407 40,023 7,342 6,769 192.4 4,224.5 1,792.0 637.2 236.8 4,251.7 1,566.8 748.0