Question

Bargain Deal, Inc., is a leading retailer specializing in consumer electronics. A condensed income statement and balance sheet for the fiscal year ended January 30, 2016, are shown below. Bargain Deal, Inc. Balance Sheet At January 30, 2016 ($ in millions) Assets Current assets: Cash and cash equivalents $ 2,066 Short-term investments 1,314 Accounts receivable, net 1,207 Merchandise inventories 5,060 Other current assets 410 Total current assets 10,057 Long-term assets 3,678 Total assets $ 13,735 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 4,900 Other current liabilities 3,375 Total current liabilities 8,275 Long-term liabilities 2,234 Shareholders’ equity 3,226 Total liabilities and shareholders' equity $ 13,735 Bargain Deal, Inc. Income Statement For the Year Ended January 30, 2016 ($ in millions) Revenues $ 39,573 Costs and expenses 38,162 Operating income 1,411 Other income (expense)* (74 ) Income before income taxes 1,337 Income tax expense 638 Net income $ 699 *Includes $161 of interest expense. Required: 1-a. Calculate the current ratio for Bargain Deal for its fiscal year ended January 30, 2016. 1-b. Calculate the acid-test ratio for Bargain Deal for its fiscal year ended January 30, 2016. 1-c. Calculate the debt to equity ratio for Bargain Deal for its fiscal year ended January 30, 2016. 1-d. Calculate the times interest earned ratio for Bargain Deal for its fiscal year ended January 30, 2016.

Answer 1