Chapter Two - Wiley

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68 CHAPTER 2 A Further Look at Financial Statements
BEFORE YOU GO ON . . .
Illustration 2-16
Best Buy’s balance
sheet
Review It
1. What are the three ways that ratios can be expressed?
2. What is the purpose of profitability ratios? Explain
earnings per share and the price-earnings ratio.
3. What does a statement of stockholders’ equity show?
USING A CLASSIFIED
BALANCE SHEET
■✓
THE
NAVIGATOR
You can learn a lot about a company’s financial health by also evaluating the relationship
between its various assets and liabilities. A simplified balance sheet
for Best Buy is provided in Illustration 2-16.
BEST BUY CO., INC.
Balance Sheets
(in thousands)
Assets March 3, 2001 February 26, 2000
Current assets
Cash and cash equivalents $ 746,879 $ 750,723
Receivables 209,031 189,301
Merchandise inventories 1,766,934 1,183,681
Other current assets 205,819 114,755
Total current assets 2,928,663 2,238,460
Property and equipment 1,987,392 1,093,471
Less: Accumulated depreciation 543,220 395,387
Net property and equipment 1,444,172 698,084
Other assets 466,752 58,798
Total assets $4,839,587 $2,995,342
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $1,772,722 $1,313,940
Accrued compensation payable 154,159 102,065
Accrued liabilities 545,590 287,888
Accrued income taxes 127,287 65,366
Current portion of long-term debt 114,940 15,790
Total current liabilities 2,714,698 1,785,049
Long-term liabilities
Long-term debt 121,952 99,448
Other long-term liabilities 181,009 14,860
Total long-term liabilities 302,961 114,308
Total liabilities 3,017,659 1,899,357
Stockholders’ equity
Common stock 597,632 267,528
Retained earnings 1,224,296 828,457
Total stockholders’ equity 1,821,928 1,095,985
Total liabilities and stockholders’ equity $4,839,587 $2,995,342