P5-1 Best Buy Co., Inc.’s consolidated balance sheets from its 2011 annual report are presented in Exhibit 5-3. a. Using the balance sheets, prepare a vertical
common-size analysis for 2011 and 2010. Use total assets as a base. b. Using the balance sheets, prepare a horizontal common-size analysis for 2011 and 2010. Use
2010 as the base. c. Comment on significant trends that appear in (a) and (b). ASSETS 26-Feb-11 27-Feb-10 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 1,114 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 Net property and equipment 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 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 356 316
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: Authorized 400,000 shares; Issued and outstanding/none Common stock, $0.10 par
value: Authorized 1.0 billion shares; Issued and outstanding 392,590,000 and 418,815,000 shares, respectively 39 42 Additional paid-in capital 18 441 Retained
earnings 6,372 5,797 Accumulated other comprehensive income 173 40 Total Best Buy Co., Inc. shareholders’ equity 6,602 6,320 Noncontrolling interests 690 644 Total
equity 7,292 6,964 Total Liabilities and Equity $17,849 $18,302 Fiscal Years Ended 26-Feb-11 27-Feb-10 28-Feb-09 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 12,169 19,998 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
714 802 674 Equity in income of affiliates 2 1 7 Net earnings including noncontrolling interests 1,366 1,394 1,033 Net earnings attributable to noncontrolling
interests -89 -77 -30 Net earnings attributable to Best Buy Co., Inc. 1,277 1,317 1,003 Earnings per share attributable to Best Buy Co., Inc. Basic $3.14 $3.16
$2.43 Diluted $3.08 $3.10 $2.39 Weighted-average common shares outstanding (in millions) Basic 406.1 416.8 412.5 Diluted 416.5 427.5 422.9
common-size analysis for 2011 and 2010. Use total assets as a base. b. Using the balance sheets, prepare a horizontal common-size analysis for 2011 and 2010. Use
2010 as the base. c. Comment on significant trends that appear in (a) and (b). ASSETS 26-Feb-11 27-Feb-10 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 1,114 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 Net property and equipment 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 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 356 316
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: Authorized 400,000 shares; Issued and outstanding/none Common stock, $0.10 par
value: Authorized 1.0 billion shares; Issued and outstanding 392,590,000 and 418,815,000 shares, respectively 39 42 Additional paid-in capital 18 441 Retained
earnings 6,372 5,797 Accumulated other comprehensive income 173 40 Total Best Buy Co., Inc. shareholders’ equity 6,602 6,320 Noncontrolling interests 690 644 Total
equity 7,292 6,964 Total Liabilities and Equity $17,849 $18,302 Fiscal Years Ended 26-Feb-11 27-Feb-10 28-Feb-09 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 12,169 19,998 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
714 802 674 Equity in income of affiliates 2 1 7 Net earnings including noncontrolling interests 1,366 1,394 1,033 Net earnings attributable to noncontrolling
interests -89 -77 -30 Net earnings attributable to Best Buy Co., Inc. 1,277 1,317 1,003 Earnings per share attributable to Best Buy Co., Inc. Basic $3.14 $3.16
$2.43 Diluted $3.08 $3.10 $2.39 Weighted-average common shares outstanding (in millions) Basic 406.1 416.8 412.5 Diluted 416.5 427.5 422.9
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