FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:Bargain Deal, Inc., is a leading retailer specializing in consumer electronics. A condensed income statement and balance sheet for the
fiscal year ended January 28, 2017, are shown below.
Current assets:
Cash and cash equivalents
Short-term investments
Accounts receivable (net)
Inventory
Other current assets
Total current assets.
Long-term assets
Total assets
Bargain Deal, Inc.
Balance Sheet
At January 28, 2017
($ in millions)
Assets
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable
Other current liabilities
Total current liabilities
Long-term liabilities
Shareholders' equity
Total liabilities and shareholders' equity
Bargain Deal, Inc.
Income Statement
For the Year Ended January 28, 2017
($ in millions)
Revenues
Costs and expenses
Operating income
Other income (expense)*
Income before income taxes
Income tax expense
Net income
Current ratio
1-a.
1-b. Acid-test ratio
1-c. Debt to equity ratio
1-d.
$39,618
38,171
1,447
Times interest earned ratio
$
(83)
1,364
773
591
$ 2,156
1,323
1,252
5,069
428
18, 228
3,723
$13,951
*Includes $242 of interest expense.
Required:
1-a. Calculate the current ratio for Bargain Deal for its fiscal year ended January 28, 2017.
1-b. Calculate the acid-test ratio for Bargain Deal for its fiscal year ended January 28, 2017.
1-c. Calculate the debt to equity ratio for Bargain Deal for its fiscal year ended January 28, 2017.
1-d. Calculate the times interest earned ratio for Bargain Deal for its fiscal year ended January 28, 2017.
(For all requirements, round your answers to 2 decimal places.)
times
$ 5,350
4,275
9,625
2,252
2,074
$13,951
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Ratio analysis helps to analyze the financial statements of the company. The management can take decisions on the basis of these ratios. It is also helpful to compare two or more financial statements.
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