Barnes and Noble, Inc.

Annual Report Barnes and Noble, Inc. By: Erica Murray ACG 2021.080

Executive Summary • Barnes and Noble,Inc. is a strong company that continues to grow larger and increase sales. This company can be expected to stay strong throughout the future http://www.barnesandnobleinc.com/for_investors/annual_reports/bnannual2004.pdf

Introduction Chief Executive Officer:Leonard Riggio Location of Home office: Barnes and Noble, Inc. 122 Fifth Ave New York, New York 10011 Ending Date of latest fiscal year-January 29, 2005 Description of principle products sold:Barnes and Noble sells a wide variety of merchandise including Books, movies, CDs and, Textbooks Main geographic area of activity-Currently 49 states, including the District of Columbia

Stock Market Information Most recent price of stock-$41.25 Twelve month trading range- $31.25-$44.75 Dividends per share- No dividends paid out Date of information: February 13, 2006 Someone investing in Barnes and Noble should go ahead and BUY do to the fact that a year ago the stock had only rose $2.25, so it could be expected to do somewhat the same and prices shouldn’t rise by much.

Audit Report Company’s independent auditors-BDO Seidman, LLP The audit reports discusses how the company conducted the report and the standards that were held. Barnes and Noble is within the standards required by the United States of America.

Industry Situation and Company Plans Barnes and Noble has a promising future with the selling of books. They have become one of the #1 Retailers in this industry and they continue to stay that way. According to the letter to the stockholders the company not only plans to bring in more books, but will continue to update their stores keeping themselves on the cutting edge.

Statement of Cash Flows Cash flows from operating more or less than net income for the past two years-More for the past two years The company is growing through investments Primary source of financing-The main source of financing comes from proceeds from issuance of long term debt Over the past two years, there has been a significant increase in cash

Balance Sheet In 2003 Barnes and Noble has over $75,132 in Stockholder’s equity than it did in 2004. In 2004 Barnes and Noble had $106,742 less in liabilities than it did in 2003. Although the assets are greater in 2003, the company is better off now because they decreased liabilities.

Income Statement Income Statement-Single Step Gross profit and income from operations have increased. However, net income has decreased. This could be due to the closing of 41 stores and only opening 32. Also the company broke ground on a new distribution center.

Accounting Policies Topics of the Notes to the Financial Statements Significant Accounting Policies: Cash- Barnes and Noble considers highly liquid instruments to be an equivalent to cash if it is purchased with a maturity of 3 months initially. Property, Plant, and Equipment- Use straight line method to calculate depreciation Revenue- recognizes sales at time of sale, and returns at time of returns. Inventory- Uses the “First in, First out method”, FIFO

Financial AnalysisMarket Strength Ratios Price/Earning per share: Dividend Yield:There have been no Dividends paid out in the past 2 years.

Financial Analysis Liquidity Ratios

Financial AnalysisProfitability Ratios In 2003 Barnes and Noble experienced a higher profit margin, and return on assets. However the Return on Equity was higher in 2004 than 2003. The Asset Turnover stayed the same for both years.

Financial AnalysisSolvency Ratio Debt to Equity: 2004~ 1.14 2003~1.15 The Ratio in 2003 is higher than the ratio is 2004. Because the ratio is greater than 1, the band owned more of the company in 2003 than in 2004.

Barnes and Noble, Inc.