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Best Buy Co., Inc. Braxton Adamson ACG2021.002. Executive Summary. Best Buy is doing well as a company. They have a higher net income over their last fiscal year and they are expanding stores throughout the country and world.
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Best Buy Co., Inc. Braxton Adamson ACG2021.002
Executive Summary • Best Buy is doing well as a company. They have a higher net income over their last fiscal year and they are expanding stores throughout the country and world. • http://media.corporate-ir.net/media_files/IROL/83/83192/2005AR/html/BestBuyAR05.pdf
Introduction • Bradbury H. Anderson is the Vice Chairman and CEO of Executive Officers • Home office is located at 7601 Penn Ave. South. Richfield Minnesota 55423-3645 • The Fiscal Year ended February 26, 2005 • Own and Operate retail stores for electronics, computers and other home necessities. • Locations: Every state in the US and
AUDIT REPORT • Wellington Management Company, LLP • The information on the company known as Best Buy is completely accurate and true in accordance with its financial statements and cash flows.
Stock Market Information • Recent price of company’s shares 59.07 • Basic earnings per share is $2.87 • Date of information 2-28-06 @ 5pm • Best Buy’s stock is sure to make money so I would recommend purchasing some stock now. Knowing that home electronics are on the rise and that the company makes more and more money every year shows that they can only do better.
Company Plans and Industry Situation • I think in my personal opinion that the electronics industry is only going to be getting better. After reading and doing research, and seeing the companies make more and more money each year, it’s a common fact that the world is only using electronics more and more. As the “letter to the stockholders states” one of the mian concerns of Best Buy is putting people first and their products second. By doing this it will help the customer realize that Best Buy cares more about them then making money.
Income Statement • The company uses a multi-step income statement • Net income expressed its greatest increase at 7.1 % in 2005.
Balance Sheet Assets from one year to the next are fairly different. From 2004 to 2005 Best Buy has made a few billion dollars. Liabilities also decreased but not by much, only 458 million dollars.
Statement of Cash Flows • Cash flow from 2005 year was only 934 million while the net earnings were 984 million that year. • In 2004 cash flow was 800 million, while net earnings were 705 million. • Best Buy is growing rapidly due to the large necessity of electronics and their view on customer relations. • In 2005 Best Buys primary financing was by long term debt. They had a 371 million dollar long term debt, while in 2004 their long term debt was only 17 million. • In conclusion the Best Buy company is on the rise. They are profiting more and more very year.
Accouting Policies • Rev. Recognition : Sales over long periods of time are put into special methods. • Investments are included with all assets, so it makes them seem like they are making more than they really are • Property, plant, and equipment are all stated in the asset category.
Accounting Policies (cont.)List the topic notes to the financial statements • Revenue Recognition • Product Warranty • Inventories • P.P.E • Short-term Investments • Long-term investments • Investments • Employee Stock Plans • Stockholders Equity • Acquisitions and Devestatures • Income Taxes
Financial Analysis and Solvency Ratios A debt ratio bigger than 1 means Best Buy finances the company rather than the stockholders By getting rid of a small amount of the debt, the solvency ratio got smaller, even though it was not by much. Most of the people best buy sells to are average common day people, by taking over other stores and getting more locations the store is sure to grow.
