Analysis and Interpretation of Profitability Balance sheets and income statements for Best Buy Co., Inc. follow.
Consolidated Statements of Earnings
For Fiscal Years Ended ($ millions) February 26, 2011 February 27, 2010 February 28, 2009
Revenue $ 50,272 $ 49,694 $ 45,015
Cost of goods sold 37,611 37,534 34,017
Restructuring charges - cost of goods sold 24 -- --
Gross Profit 12,637 12,160 10,998
Selling, general and administrative
expenses 10,325 9,873 8,984
Restructuring charges 198 52 78
Goodwill and tradename impairment -- -- 66
Operating income 2,114 2,235 1,870
Other income (expense)
Investment income and other 51 54 35
Investment impairment -- -- (111)
Interest expense (87) (94) (94)
Earnings before income tax expense
and equity in income of affiliates 2,078 2,195 1,700
Income tax expense 174 802 674
Equity in income of affiliates 2 1 7
Net earnings including noncontrolling
interest 1,366 1,394 1,033
Net income attributable to
noncontrolling interest (89) (77) (30)
Net income attributable to Best
Buy Co., Inc. $ 1,277 $ 1,317 $ 1,003
Consolidated Balance Sheets
($ millions, except footnotes) February 26, 2011 February 27, 2010
Assets
Current assets
Cash and cash equivalents $ 1,103 $ 1,826
Short-term investments 22 90
Receivables 2,348 2,020
Merchandise inventories 5,897 5,486
Other current assets 1,103 1,144
Total current assets 10,473 10,566
Property and equipment
Land and buildings 766 757
Leasehold improvements 2,318 2,154
Fixtures and equipment 4,701 4,447
Property under capital lease 120 95
7,905 7,453
Less: Accumulated depreciation 4,082 3,383
Property and equipment, net 3,823 4,070
Goodwill 2,454 2,452
Tradenames, net 133 159
Customer relationships, net 203 279
Equity and other investments 328 324
Other noncurrent assets 435 452
Total assets $ 17,849 $ 18,302
Liabilities and equity
Current liabilities
Accounts payable $ 4,894 $ 5,276
Unredeemed gift card liabilities 474 463
Accrued compensation and
related expenses 570 544
Accrued liabilities 1,471 1,681
Accrued income taxes 256 316
Short-term debt 557 663
Current portion of long-term debt 441 35
Total current liabilities 8,663 8,978
Long-term liabilities 1,183 1,256
Long-term debt 711 1,104
Equity
Best Buy Co., Inc. Shareholders' equity
Preferred stock, $1.00 par value -- --
Common stock, $0.10 par value 39 42
Additional paid-in capital 18 441
Retained earnings 6,372 5,797
Accumulated other comprehensive
income (loss) 173 40
Total Best Buy Co., Inc.
shareholders' equity 6,602 6,320
Noncontrolling interest 690 644
Total equity 7,292 6,964
Total liabilities and equity $ 17,849 $ 18,302
a. Compute ROE for 2011.
Do not round until your final answer. Round answer to two decimal places.
ROE =
%
b. Confirm that ROE equals ROE computed using the component measures for profit margin, asset turnover, and financial leverage using: ROE = PM * AT * FL.
Compute the components of ROE.
Do not round until your final answer. Round answer to two decimal places.
PM =
%
AT =
FL =
c. Compute adjusted ROA. Assume a tax rate of: 37.0%.
Round answer to two decimal places.
Adjusted ROA =
%