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Terrylee Baptist, Victoria

Advance Financial Che, Victor Miranda


Dr. Ian McMillan
Management May 19th,2019
BALANCE SHEET VERTICAL ANALYSIS
BEST BUY COMPANY INC.
Balance Sheet
VERTICAL
Period Ending 2018 2016 2018 2017 2016
Current Assets 2017
Cash And Cash Equivalents $ 1,101.00 $ 2,240.00 $ 1,976.00 8% 16% 15%
Short Term Investments $ 2,032.00 $ 1,681.00 $ 1,305.00 16% 12% 10%
Net Receivables $ 1,049.00 $ 1,347.00 $ 1,162.00 8% 10% 9%
Inventory $ 5,209.00 $ 4,864.00 $ 5,051.00 40% 35% 37%
Other Current Assets $ 438.00 $ 384.00 $ 392.00 3% 3% 3%
Total Current Asets $ 9,829.00 $ 10,516.00 $ 9,886.00 75% 2516% 73%
Long Term Investments
Property Plant and Equipment $ 2,421.00 $ 2,293.00 $ 2,346.00 19% 17% 17%
Goodwill $ 425.00 $ 425.00 $ 425.00 3% 3% 3%
Other Assets $ 374.00 $ 622.00 $ 862.00 3% 4% 6%
Deffered Long Term Assets Charges
Total Assets $ 13,049.00 $ 13,856.00 $ 13,519.00 100% 100% 100%
Current Liabilities
Total Current Liabilities
Long Term Debt $ 2,164.00 $ 2,069.00 $ 2,611.00 17% 15% 19%
Other Liabilities $ 6,820.00 $ 6,660.00 $ 6,173.00 52% 48% 46%
Deferred Long Term Liability Charges $ 453.00 $ 418.00 $ 357.00 3% 3% 3%
Total Liabilities $ 9,437.00 $ 9,147.00 $ 9,141.00 72% 66% 68%

Stockholders' Equity
Common Stock $ 28.00 $ 31.00 $ 32.00 0% 0% 0%
Retained Earnings $ 3,270.00 $ 4,399.00 $ 4,075.00 25% 32% 30%
Other Stockholder Equity $ 314.00 $ 279.00 $ 271.00 2% 2% 2%
Total Shareholder Equity $ 3,612.00 $ 4,709.00 $ 4,378.00 28% 34% 32%
Net Tangible Assets $ 3,187.00 $ 4,284.00 $ 3,953.00 24% 31% 29%
BALANCE SHEET HORIZONTAL ANALYSIS
BEST BUY COMPANY INC. HORIZONTAL

Balance Sheet
Base Year
Period Ending 2018 2017 2016 2018 2017 It is noted that the total
Current Assets assets of best buy
Cash And Cash Equivalents $ 1,101.00 $ 2,240.00 $ 1,976.00 -44% 13%
Short Term Investments $ 2,032.00 $ 1,681.00 $ 1,305.00
decreased in 2018 this
Net Receivables $ 1,049.00 $ 1,347.00 $ 1,162.00 -10% 16% coincides with the
Inventory
Other Current Assets
$ 5,209.00 $
$ 438.00 $
4,864.00 $ 5,051.00
384.00 $ 392.00 12% -2%
closing of the best buy
Total Current Asets $ 9,829.00 $ 10,516.00 $ 9,886.00 -1% 6%
mobile division
Long Term Investments $ - $ - $ -
Property Plant and Equipment $ 2,421.00 $ 2,293.00 $ 2,346.00 3% -2%
Goodwill $ 425.00 $ 425.00 $ 425.00 0% 0%
Short Term Investments
Other Assets $ 374.00 $ 622.00 $ 862.00 -57% -28% show a steady increase
Total Assets
Current Liabilities
$ 13,049.00 $ 13,856.00 $ 13,519.00 due to interest rates
Total Current Liabilities remaining constant. On
Long Term Debt
Other Liabilities
$ 2,164.00 $
$ 6,820.00 $
2,069.00 $ 2,611.00
6,660.00 $ 6,173.00
-17%
10%
-21%
8%
the other hand,
Deferred Long Term Liability
Charges $ 453.00 $ 418.00 $ 357.00 27% 17% Property, Plant and
Total Liabilities $ 9,437.00 $ 9,147.00 $ 9,141.00 3% 0% Equipment decreased in
Stockholders' Equity $ - $ - $ -
Common Stock $ 28.00 $ 31.00 $ 32.00 -13% -3% 2017 by 2% and in 2018
Retained Earnings $ 3,270.00 $ 4,399.00 $ 4,075.00 -20% 8% increased by 3%.
Other Stockholder Equity $ 314.00 $ 279.00 $ 271.00 16% 3%
Total Shareholder Equity $ 3,612.00 $ 4,709.00 $ 4,378.00 -17% 8%
Net Tangible Assets $ 3,187.00 $ 4,284.00 $ 3,953.00 -19% 8%
INCOME STATEMENT VERTICAL ANALYSIS
BEST BUY COMPANY INC. Income Statement BEST BUY COMPANY INC. Vertical Analysis

Highlights Total Revenue


2018

$ 42,151.00
2017

$ 39,403.00 $
2016

39,528.00 Total Revenue


2018

100.00%
2017

100.00%
2016

100.00%
Operation Cost of Revenue $ 32,275.00 $ 29,963.00 $ 30,337.00 Cost of Revenue 76.57% 76.04% 76.75%

Expense has been Gross Profit $ 9,876.00 $ 9,440.00 $ 9,191.00 Gross Profit 23.43% 23.96% 23.25%

reducing over the Operating Expenses Operating Expenses

years. Selling General and


Administrative Expense $ 8,023.00 $ 7,547.00 $ 7,618.00
Selling General and
Administrative Expense 19.03% 19.15% 19.27%

Non Recurring Non Recurring 0.00% 0.00% 0.00%

Restructuring Charges $ 10.00 $ 39.00 $ 198.00 Restructuring Charges 0.02% 0.10% 0.50%

Net Income best Total Operating Expense $ 8,033.00 $ 7,586.00 $ 7,816.00 Total Operating Expense 19.06% 19.25% 19.77%

year was 2017 Operating Income or Loss $ 1,843.00 $ 1,854.00 $ 1,375.00 Operating Income or Loss 4.37% 4.71% 3.48%

1.22 B
other income $ (25.00) $ (17.00) $ 25.00 other income -0.06% -0.04% 0.06%

Earnings Before Interest and Taxes Earnings Before Interest and Taxes 0.00% 0.00% 0.00%

Income Before Tax Income Before Tax 0.00% 0.00% 0.00%

Income Tax Expense $ 818.00 $ 609.00 $ 503.00 Income Tax Expense 1.94% 1.55% 1.27%

Minority Interest Minority Interest 0.00% 0.00% 0.00%

Net Income From Continuing Ops Net Income From Continuing Ops 0.00% 0.00% 0.00%

Extraordinary Items Extraordinary Items

Net Income $ 1,000.00 $ 1,228.00 $ 897.00 Net Income 2.37% 3.12% 2.27%

Net Income Applicable Net Income Applicable


to Common Shares to Common Shares 0.00% 0.00% 0.00%
INCOME STATEMENT HORIZONTAL ANALYSIS
• Highlights
BEST BUY COMPANY INC. Income Statement BEST BUY COMPANY INC. Horizontal Analysis
2018 2017 2016 2018 2017

Total Revenue $ 42,151.00 $ 39,403.00 $ 39,528.00 Total Revenue 7% 0%

Cost of Revenue $ 32,275.00 $ 29,963.00 $ 30,337.00 Cost of Revenue 8% -1%


• Healthy Gross profit 9.8
Gross Profit $ 9,876.00 $ 9,440.00 $ 9,191.00 Gross Profit 5% 3% Billion, 9.44 B and 9.19B
Operating Expenses Operating Expenses

Selling General and Selling General and


Administrative Expense $ 8,023.00 $ 7,547.00 $ 7,618.00 Administrative Expense 6% -1%
• Operating
Non Recurring Non Recurring

Restructuring Charges $ 10.00 $ 39.00 $ 198.00 Restructuring Charges -74% -80% • Expense kept low
Total Operating Expense $ 8,033.00 $ 7,586.00 $ 7,816.00 Total Operating Expense 6% -3% • 1.8 B, 1.8 and 1.3
Operating Income or Loss $ 1,843.00 $ 1,854.00 $ 1,375.00 Operating Income or Loss -1% 35%

other income $ (25.00) $ (17.00) $ 25.00 other income


• Net Income
Earnings Before Interest and Taxes

Income Before Tax


Earnings Before Interest and Taxes

Income Before Tax


• 1 B, 1.22 B and .8 B
Income Tax Expense $ 818.00 $ 609.00 $ 503.00 Income Tax Expense 34% 21%

Net Income $ 1,000.00 $ 1,228.00 $ 897.00 Net Income -19% 37%


Ratios
2018 2017 2016 2018 2017 2016

Current Assets $9,829.00 $10,516.00 $9886.00 Total Assets $13,049.00 $13,856.00 $13,519.00

Current $6,820.00 $6,660.00 $6,173.00 Total Liabilities $9,437.00 $9,147 $9,141.00


Liabilities
Current Ratio 1.44% 1.57% 1.6% Debt Ratio 1.38% 1.5% 1.47%

The table above indicates that the company


would be able to meet their short term liabilities A low debt ratios means that best buy has a strong equity
with their current assets position and would be looked favorably my investors. Also
of importance is that they maintain the percentage
consistent, that speaks good of the management team.
Ratios
2018 2017 2016 2018 2017 2016

Sales $ 42,151.00 $ 39,403.00 $ 39,528.00

Net Income $ 1,000.00 $ 1,228.00 $ 897.00 Cost of Goods Sold $ (32,275.00) $ (29,963.00) $ (30,337.00)

$ 9,876.00 $ 9,440.00 $ 9,191.00


Total Assets $ 13,049.00 $ 13,856.00 $ 13,519.00 Sales $ 42,151.00 $ 39,403.00 $ 39,528.00

Return on Assets 8% 9% 7% Gross Profit Margin 23% 24% 23%

The return on assets has been consistent through out Gross Profit has been consistent which can be
so for example in the year that hey had the highest interpreted to their mantra that they would not
income they also experienced the highest return on compete on price in exchange the offer a customer
assets. experience that the customer would prefer to
purchase from them and that is what they did with
their online platforms where you can buy online and
pick it up at a store 15 minutes away from your
home.
REFERENCES

• Gibson, C. H. (2013). Financial reporting & analysis : using financial


accounting information. Mason, Oh: Cengage Learning.
• https://en.wikipedia.org/wiki/Financial_statement_analysis