Financial Analysis BBY.

In FA we usually analyze recent year with the prior one and evaluate companys performance on the basis
of the three statements. Three statements include balance sheet, Income statement and Cash flow
statement. In this case we only have balance sheet and income statement.

Income Statement Analysis

In IS we can see that there is drastic loss in the fiscal year 2013 as compared to fiscal year 2012. Income
statement is the main component to see through the transactions in the business routines. And to have the
bottom line and top line analysis. For these analysis we need to run some of the ratios to incorporate exact
trends in the firms operations.

Net Profit Margin

Company was already in loss and still they are getting worse according to the NPM ratio. NPM 2013 is
0.97% whereas in 2012 it was 3.09. Which was already in loss and the companys margin was drastically
decreasing. Company is insufficient to reinvest thats why theyre selling their some outlets and making
new in the consumer target market.

Gross Profit Margin

Gross means here sales minus cost of goods sold in the firm. This ratio will help us to analyze better the
weight of the expenses BBY has in the fiscal year 2013 and 2012. GPM in fiscal year 2013 is 23.6
percent and in 2012 it was 24.6 percent, one percent decrease in the GPM ratio. Now by comparing we
can analyze that company is having a lot of expenses and other expenditures which are hurting the firms
margin and theyre in difficult stage. In order to survive they have to increase their sales and to
incorporate new changes in the society.

Return on Assets
This ratio basically represents the after tax return on the total investment (assets) of the firm. This will
explain that the firms value per dollar. In fiscal year 2013 ROA is 2.6 percent and in fiscal year 2012
ROA was 8.9 percent which explains that firm is recently closed its some of the outlets internationally
and domestically. 6.3 percent decrease in return on total assets.

Balace Sheet Analysis

Current Ratio
It is basically the analysis of the firms current assets and currents liabilities. In 2013 CR is 1.11 percent
and in fiscal year 2012 it was 1.16 percent which means that in 2013 for every one unit of liability the
firm has 1.11 units of the assets which is reduced by the 1.16 from 2012. It means that companys current
assets are shrinking day by day. In order to grab back their current assets they have to maintain market
share.

Quick Ratio
This ratio is to analyze the firms ability to meet the short term obligations other than its inventory in the
current assets. In 2013 QR is 50 percent and it was 51.5 percent in 2012. Which means that firms
inventory is big block as they were unable to sell it off effectively.
Inventory Turnover
Inventory turnover is basically to analyze how quickly a firm can convert its inventory into cash. In 2013
after shutting its some of the outlets firm managed the funds and improved its inventory turnover by 2
percent.

Fixed Assets Turnover

BBYs fixed assets turnover also decreased by 0.2 percent in 2013 because of downsizing of non-
profitable outlets in the world and managed its funds to reinvest in the profitable outlet to make them
more effective in future.

Total Assets Turnover

Total assets turnover has decreased by 0.12 percent which means that company is using downsizing
strategy in order to be in the survival stage of the firm.

Accounts Receivables Turnover

This ratio is used to analyze the firms time to collect its credit sales in percentage terms. In 2013 it is
16.67 percent and in 2012 it was 20.13 percent. This is almost 4 percent better than 2012.

Average Collection Period

This ratio is used to analyze the firms time to collect its credit sales in days. In 2013 it is 21.89 and in
2012 it was 18.12. which means that in 2012 average collection period is better in terms of days. Whereas
in terms of percentage method it shows the opposite results.