Brain J. Dunn, CEO Richfield, Minnesota U.S Latest fiscal year: 2010 Best Buy is an American retailer that sells a wide variety of electronic

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2 Current Shareholders in Best Buy should hold their stock until price increases, and new investors should not invest if looking for fast money, Best Buy s stock may not more until more economic growth occurs. Market prices are stable but barely move, and Best Buy owes lots of inventory on account, and faces fierce competition. Main Annual Report

3 Brain J. Dunn, CEO Richfield, Minnesota U.S Latest fiscal year: 2010 Best Buy is an American retailer that sells a wide variety of electronic devices, and media. Main geographic area of Activity is in the United States.

4 Company Auditor is Deloitte & Touche Best Buy operations seem smooth, definitely shows an American consumer, however things are not perfect. Although they re the country s largest consumer electronics retailer, they missed their expected revenue, by 0.4 billion. Compared to similar stores, Best Buy seems to be doing well as they wrap up their 2010 fiscal year.

5 Company s stock Price: $33.60 Annual Trading Range: High: 46.00, Low: Dividend Per Share: 0.58 Date: Information as of 02/11/2011 Personally I would advise a share holder to hold their stock until price goes above $38 and then sell. Price fluctuates around $35 annually.

6 Best Buy is a successful electronic retailer that forward to a brighter future, with innovations, competitiveness, and social outreach. Short-term future plans: Scholarship Opportunities for College Students Reducing carbon emissions by purchasing green products. Offering a buyback program for products that become outdated quickly. Best Buy had revenue of 8.4 billion end of December 2010 The company encourages investors to buy stock, estimating a higher earning per share next fiscal year. Source 1 Source 2

7 Income Statement is more like the multistep format. In Millions Feb 2010 Feb 2009 March 2008 Gross Profit Income from operations Net Income

8 Fiscal Year Assets Liabilities Stockholder s E Liabil + SHE The biggest increase was in the Asset account. Upon first glance this may seem desirable, but considering the Liabilities increased as well it leaves me to conclude Best Buy has a lot of products on credit, increasing accounts payable. Stockholder s equity has increased slightly, it seems investors have increased confidence in investing with Best Buy.

9 For the past two years Best Buy s Cash flow from Operations has been greater than Net Income. The Company mainly grows through inventories, especially considering the slight decrease in Investing Activities. Best Buy has experienced a major increase in Liabilities from last fiscal year, which could mean a lot of Inventories are bought on account. Best Buy has spend a great amount of money on Capital Expenditures as well. Although Cash Flow from Operating Activities in 2010 is higher than the last two years, Overall cash has decreased.

10 Best Buy s revenue is totaled from world wide operations, however sales or notes payable made to other sellers are not included. Fiscal year ends February. Foreign Currency is balanced to the USD s value to keep the total revenue and net earnings normal. Best Buy conforms with a general revenue recognition standard. Note topics are not specified on Financial statement, however generally notes receivable for money owed on credit (including financing offers for customers), notes payable would be inventories bought with credit or to increase other assets.

11 Last two fiscal years: 2009/2008 (In Billions or %) Working Capital: -0.25/0.57 It seems the recession hit best buy hard last quarter. Current Ratio: 1% (.97)/1.1%(1.08) Best Buy s liabilities and accounts receivable increased in 2009 Receivable Turnover: (27.3)/(24.2) increase in inventory Average days sales uncollected: / (In thousands) Increase in accounts receivable or bad debts. Inventory turnover: 7.2/6.4 increase in inventory, increase in liabilities Average Inventories on Hand: / (In thousands) Best Buy must have predicted an increase in sales in 2009 to have increased inventories, but their net incomes most likely suffered that year.

12 Last two fiscal years: 2009/2008 (In Billions or %) Profit Margin: 23%/22% 2009 higher gross profit in 2009, but it barely makes much difference. Asset turnover: 5.8/5.2 increase in assets and liabilities Return on Assets: 1.3/ had less depreciation, and less cost. Return on Equity: 2.1/1.9 despite having more costs, in 2009 Best Buy s increase in Net income and equity gave it a larger return.

13 Last two fiscal years: 2009/2008 (In Billions or %) Debt to Equity Ratio: 2.1/1.8 These ratios state that the majority of the assets have financed by creditors. In 2009 best buys debt increase along with inventory, perhaps Best Buy falsely predicted economy growth in this fiscal year.

14 Last two fiscal years: 2009/2008 Price & earning per share: 1.4/13.6 Investor confidence decreased significantly from 2008 to 2009, this most likely resulted due to the fact that Best Buy s liabilities went up within just one year. Dividend Yield: 1.42% / 1.9% Wise investors that kept up with the Market Prices probably did not wish to buy shares in 2009 due to such a low return rate. Personally if I owned shares in Best Buy around this time I would hold.

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