Refer to Best Buy’s financial statements in Appendix A for the following questions.

Required 1. What amount of total liabilities does Best Buy report for each of the fiscal years ended February 28, 2004, and February 26, 2005?

2. What amount of total assets does Best Buy report for each of the fiscal years ended February 28, 2004, and February 26, 2005?

Compute Best Buy’s debt ratio for each of the fiscal years ended February 28, 2004, and February 26, 2005.

In which fiscal year did Best Buy employ more financial leverage (February 28, 2004, or February 26, 2005)? Explain.

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Five-Year Financial Highlights $ in millions, except per share amounts Fiscal Year Consolidated Statements of Earnings Deta Revenue Operating income Earnings from continuing operations Loss from discontinued operations, net ef 2005 2004 2003 2002 2001 $27.433 $24,548 $20,943 $17.711 $15,189 1,442 1,304 1,010 908 611 934 800 622 570 401 tax 129) (441) 151 Gain (loss) on disposal of discontinued operations, net of tax 50 166) Cumulative effect of change in accounting principles, net of tax (821 Net eamings 984 705 99 570 396 Per Share Data Continuing operations $2.79 $2.41 $1.90 $1.77 $1.26 Discontinued operations 10.09) (1.34) 10.021 Confession disposal of discontinued operations 0.15 10.20 Cumulative effect of accounting changes (0.251 Net earings 294 2.13 0.31 1.77 1.24 Cash dividends declared and poid 0.42 0.40 Common stock price High 62.20 62.70 53.75 51.47 59.25 Low 43.87 25.55 16.99 22.42 14.00 Operating Statistics Comparable store sales change 4.3% 7.1% 2.4% 1,9% 4.9% Gross profit rate 23.7% 23.9% 23.6% 20.0% 18.5% Selling, general and administrative expense ral 18.4% 18.6% 18.8% 14.9% 14.5% Operating income rate 5.3% 5.3% 4.8% 5.1% 4.0% Year-End Deto Current ratio 1.4 13 1.3 1.2 1.3 Total assets $10,294 $8,652 $7,694 $7,367 $4,840 Number of ston US. Best Buy Total shareholders' equity Magnolia Audio Video stores International stores Total retail square footage 1000 US. Best Buy o Magnolia Audio Video stores International stores Long-term debe including current portion 600 4.449 8.50 834 920 296 3,422 2,730 2,521 1,822 res 668 608 548 481 419 20 22 19 13 13 144 127 112 95 28:260 194 3,139 26,421 218 2,800 24,243 189 2,375 21,599 133 1,923 19010 133