Best Buy Co, Inc., is a leading retailer specializing in consumer electronics. A condensed income statement and balance sheet for the fiscal year ended February 1, 2020, are shown next.

Liquidity and solvency ratios for the industry are as follows:

1. Determine the following ratios for Best Buy for its fiscal year ended February 1, 2020.
a. Current ratio
b. Acid-test ratio
c. Debt to equity ratio
d. Times interest earned ratio
2. Using the ratios from requirement 1, assess Best Buy’s liquidity and solvency relative to its industry

Transcribed Image Text:

Best Buy Co., Inc. Balance Sheet At February 1, 2020 ($ in millions) Assets Liabilities and Shareholders' Equity Current assets: Cash and cash equivalents Accounts receivable (net) Inventory Other current assets Total current assets Long-term assets Total assets Current liabilities: Accounts payable Other current liabilities Total current liabilities Long-term liabilities Shareholders' equity Total liabilities and shareholders' equity $ 2,229 1,149 5,174 305 8,857 6,734 $15,591 $5,288 2,772 8,060 4,052 3,479 $15,591