Report SEC 10-K
Hide Assignment InformationInstructions
You will be graded based on the point distribution shown below for each section of this report. This grading criteria is very specific to provide you with detailed guidance in helping you prepare your report and PPT presentation. The distribution of points below supersedes the generic rubric found on the course website for both the report and PPT presentation.
See the attached file for a sample of the Nordstrom report
FORMAT AND PROJECT REQUIREMENTS
SEC Report: 100 points
Deadline: Week 7
Name of your Company
Your name:
Course Title and Number
Professor’s Name
THE ABOVE INFORMATION SHOULD BE IN YOUR TITLE PAGE
PAGE 2: This page is the start of the main body of your paper. Your paper must have the section headings in bold and follow the same numbering sequence as below.
I. Introduction and Company Background Information (minimum 1 page) 8 points.
II. Discussion on Income Statement (minimum ½ page) 12 points
III. Discussion on
Balance Sheet
(minimum ½ page) 12 points
IV. Discussion on Statement of Cash Flows (minimum ½ page) 12 points
V. Ratio Analysis (need a minimum of 2 ratios) 10 points. Computational support must be shown. Alternatively, if you found the ratios on a website, you can use it with the condition that you must cite your source here in this section as well as at the end of the paper along with other citations.
(1) Current Ratio: 1.1
Comments: You must briefly interpret the results in 1-2 sentences.
(2) Accounts Receivable Turnover 2.5
Comments: You must briefly interpret the results in 1-2 sentences individually for each ratio.
Note: The above ratios were provided for illustrative purposes only. You decide which ratios you wish to use. You must follow the format provided in the sample Nordstrom report to avoid loss of points.
VI. Horizontal Analysis (need a minimum of 2 items-1 from Balance Sheet and 1 from Income Statement) 10 points
Account 2016 2015 Difference $ Difference %
Cash $1,050,000 1,000000 $50,000 5%
Accounts Receivable etc.
Comments: You must briefly comment on each item interpreting the results.
Note: The above accounts were provided for illustrative purposes only. You decide which accounts to analyze. You must follow the format provided in the sample Nordstrom report to avoid loss of points.
VII. Vertical Analysis (need a minimum of 2 items-1 from Balance Sheet and 1 from Income Statement) 10 points
Note: The base accounts Sales or Total Assets or Total Liabilities & Stockholders’ Equity does not count as one of the two items although you need to include the base account used.
Eg. Income Statement
Base: Revenues $5,000,000
CGS $1,000,000/$5,000,000 =20%
Net Income: $2,000,000/$5,000,000=40%
Balance Sheet
Total Assets Base: 10,000,000.
1. Cash 1,000,000/10,000,000 = 10%.
2. Inventory: 2,000,000/10,000,000=20%.
Comments: You must briefly comment on each item interpreting the results.
Note: You must follow the format provided in the sample Nordstrom report to avoid loss of points.
VII. Management Analysis & Discussion (MD&A): 15 points
Write a minimum of 3/4 page on anything of interest you read in the M D & A section of your SEC company
VIII. Conclusion (minimum 1/4 page) 5 points
IX. References: Minimum of three. 6 points
Nordstrom Inc.
Deja Jackson
ACCT: 221
Professor Phan
1.Introduction and Company Background Information (minimum 1 page) 8 points.
In 1901, John W. Nordstrom (JWN) opened a shoe store with Carl F. Wallin. Collectively, they
had the idea that customers deserved the best service, selection, quality, and value. With the
newfound success, in 1923 they open escalate. two successful shoe stores were a lot for the men
to handle. Carl and John both retired from the business and sold their shares to the Nordstrom
sons. After being in the business for more than 30 years John’s third son Lloyd had taking his
father’s small shoe store and transformed it into the largest shoe store in the country.
With the growth of the company Nordstrom began to sell women’s clothing, men’s
clothing and children’s apparel in 1966. By 1971, Nordstrom Rack had become the largest
fashion specialty store on the entire West Coast, with surpassing over $100 million in annual
sales. In this year they also went public, and the company was renamed Nordstrom, Inc. 1973,
Nordstrom opened its first clearance center merchandise store in the basement of the Seattle
location. Continuing to move with the growth of technology, Nordstrom launched
Nordstrom.com in 1998, so customers would have access to shop worldwide.
Today, Nordstrom, Nordstrom Local, and Nordstrom Rack now operates over 350 stores
globally, offering a vast selection of more than 400 name brands including Hermes, Gucci,
Prada, Alexander Wang, Ives Saint Laurent, Balenciaga, Mugler and more. They also began
selling kitchen equipment, fragrances, and makeup. The Nordstrom boys also exceeded John W.
Nordstrom and Carl F. Wallin’s expectations with their passion for the family business. Notably,
Nordstrom Inc. is the largest employer of tailors in North America today.
As part of this paper, we will take a deep look at the financial documents of Nordstrom, Inc., for
the years of 2022 through 2020, in order to determine their financial performance. It is our
objective to analyze the financial health of this company over the past two years by analyzing the
income statements, balance sheets, and statements of cash flows. Our goal will be to understand
the trends of their company and attempt to interpret the results based on their trends.
II. Discussion on Income Statement (minimum ½ page) 12 points
This famous off-price retail company provides valuable insights into its financial performance
from 2020 to 2022. This document aims to comprehensively analyze Nordstrom Rack’s
income statement from 2022 to 2020, highlighting key trends and changes in the company’s
financial performance.
As a result of changes in consumer spending habits and competition in the retail sector,
Nordstrom Rack generated $15,530 million in revenue in 2022, representing a slight decrease
from the previous year. A slight increase was seen in Nordstrom Rack’s cost of goods sold
(COGS) in 2022 compared to 2023. In addition to higher costs associated with acquiring
inventory and increased transportation costs, the increase in COGS can also be attributed to
several factors. In 2022, Nordstrom Rack’s gross profit reached $1.3 billion, a slight increase
over the previous year attributed to effective cost management and margin control. Despite
lower operating income and higher interest expenses, Nordstrom Rack earned $245 million in
net income in 2022. (Nordstrom, Inc., 2023).
With $10,357 million in revenue in 2020, Nordstrom Rack represented a slight increase over
the previous year. This increase can be attributed to Nordstrom Rack’s focus on developing
new stores and attracting customers. For Nordstrom Rack, the cost of goods sold (COGS) in
2020 was $7,600 million, an increase of 2%. The gross profit for Nordstrom Rack in 2020 was
$1.3 billion, a slight increase compared to the previous year. This increase can be attributed to
the company’s ability to manage its costs and control its margins effectively. Net income for
Nordstrom Rack in 2020 was a massive loss of $690 million, representing a decrease
compared to the previous year primarily due to the global pandemic. (Nordstrom, Inc., 2023).
Overall, Nordstrom Rack’s income statement analysis from 2022 to 2020 reveals a pattern of
revenue growth, albeit with a slight decline in net income. The company’s ability to
effectively manage its costs and control its margins is commendable, but challenges lie ahead
as competition in the retail industry continues to intensify.
III. Discussion on Balance Sheet (minimum ½ page) 12 points
We will examine the components of Nordstrom’s balance sheet over time to see how they have
changed over the years as well as their assets, liabilities, and equity. Cash and Cash Equivalents
include cash, short-term investments, and liquid assets that can be quickly converted into cash.
On the asset side of Nordstrom’s balance sheet, the current assets section has experienced
significant changes. In 2022, the current assets stood at $3,209 million, while the current assets
in 2021 was at $3,172 million. This increase in current assets represents the company’s ability to
generate cash from its operations. The increase in current assets can be attributed to a higher
accounts receivable balance, which reflects the buildup of customer payments. Additionally,
there was an increase in inventory, as Nordstrom has stocked up on merchandise to meet
customer demand. (Nordstrom, Inc., 2023).
Property, plant, and equipment (PP&E) or long-term assets of Nordstrom have also fluctuated. A
decrease of $390 million in long-term assets is primarily the result of the sale of certain property,
plant, and equipment items in 2021. It is important to note that Nordstrom continues to invest
heavily in expanding its physical store network, which may result in long-term investments.
(Nordstrom, Inc., 2023).
Moreover, Nordstrom’s current liabilities have also changed. In 2022, the company reported
$1,203 million in current liabilities, a slight decrease of $1,160 in 2021. This decrease can be
attributed to a decline in accounts payable and accrued liabilities. It is possible that Nordstrom
negotiated favorable payment terms with its suppliers, reducing outstanding liabilities. In
addition, certain liabilities may have been paid. (Nordstrom, Inc., 2023).
In 2021, Nordstrom’s shareholders’ equity stood at $581 million, and increased to $739 million in
2022. Existing shareholders’ ownership percentages have increased due to the issuance of new
shares through equity offerings. Nordstrom also paid or reinvested dividends, reducing retained
earnings. (Nordstrom, Inc., 2023).
IV. Discussion on Statement of Cash Flows (minimum ½ page) 12 points
The statement of cash flows provides a detailed picture of the cash inflows and outflows of a
company during a specific period. This document analyzes Nordstrom, Inc.’s 2022 to 2021
statement of cash flows and highlights the major components and changes.
Operating activities involve the primary cash inflows and outflows generated by a company’s
core business operations. Nordstrom, Inc. reported net cash provided by operating activities of
$245 million and $178 million for the years 2022 and 2021, respectively. These amounts include
cash received from selling products and services, as well as cash payments for expenses such as
rent, salaries, and inventory purchases. (Nordstrom, Inc., 2023).
Nordstrom, Inc.’s investing cash flows were $393 million and $521 million, respectively, for
2022 and 2021. Investment activities include acquiring and disposing of long-term assets such as
equipment, plants, and property. Purchase and disposal of assets result in cash inflows as well as
cash payments. (Nordstrom, Inc., 2023).
Financing activities involve raising funds through the issuance of equity and debt, as well as
the payment of dividends and borrowings. Nordstrom, Inc. had financing cash flows of $186
million in 2022. This amount includes cash received from issuing common stock and cash
used for paying off long-term debt and issuing short-term debt. In 2021, the company had
financing cash flows of $544 million. This amount includes cash received from issuing long term debt, which was offset by cash used for dividend payments. (Nordstrom, Inc., 2023).
V. Ratio Analysis (need a minimum of 2 ratios) 10 points. Computational support must
be shown. Alternatively, if you found the ratios on a website, you can use it with the
condition that you must cite your source here in this section as well as at the end of the
paper along with other citations.
(All numbers in millions except percentages)
Current Ratio
Formula
Ratio
Current Assets/ Current
3,209/2,990=1.07
Liabilities
A current ratio of 1.07 indicates that a company has $1.07 million of current assets for every
$1 of current liabilities. This indicates that the company has sufficient current assets to meet its
current obligations.
Debt to Income Ratio
Total Liabilities/Total Assets
2,990/3,209 x 100 = 93.2%
93.2% of Nordstrom’s debt to income ratio goes towards debt payments, including mortgages,
credit cards, student loans, and other loans. In this ratio, debt is higher than income, which
may impact financial stability and the ability to meet financial obligations.
VI. Horizontal Analysis (need a minimum of 2 items-1 from Balance Sheet and 1 from
Income Statement) 10 points
(All numbers in millions except percentages)
Balance Sheet
Accounts
Receivable, Net
2022
2021
Difference $
Difference %
265
255
10
3.8%
Accounts receivable represents the amount of money owed to a company by its customers for
goods or services provided on credit.
Merchandise
Inventories
1,941
2,289
(348)
16.5%
This is the cost of the amount of inventory on hand. It shows that inventories had a marginal
increase, but not enough to be significant.
Cash and Cash
Equivalents
687
322
365
72.3%
This is the amount of cash or other immediately available liquid assets. Nordstrom had a
increase of cash. This cash may be used to pay off debt or reinvest back into the company.
(Nordstrom, Inc., 2023).
VII. Vertical Analysis (need a minimum of 2 items-1 from Balance Sheet and 1 from
Income Statement) 10 pointset and 1 from Income Statement) 10 points
(All numbers in millions except percentages)
Income Statement
Amount
Percentage of Total
Total Revenue
15,530
100%
Net Sales
15,092
(15,092/15,530) * 100 = 97.2%
Cost of Sales
10,019
(10,019/15,530) * 100 = 64.5%
This vertical analysis show that net sales made up over 97% of Nordstrom, Inc.’s total revenue,
Cost of Sales and related buying and occupancy costs made up 64.5% of the total revenue.
(Nordstrom, Inc., 2023).
Balance Sheet
Amount
Percentage of Total
Total Assets
8,745
100%
Prepaid Expenses and
316
(316/8,745) * 100 = 4%
1,941
(1,941/8,745) * 100 = 22.2%
Other current Assets
Merchandise
inventories
This shows that Nordstrom’s Merchandise Inventories made up 22.2% of the total assets. Prepaid
Expenses and other Current Assets made up only 4% of the Total Assets.
VII. Management Analysis & Discussion (MD&A): 15 points
Nordstrom is more consistent and more innovative than ever before. Within their Management
Analysis and Discussion, they expressed that they are continuing to purge “older and
unproductive inventory”. By Constantly updating their inventory they are providing a new
experience for customers every time they shop. Also, by getting rid of their inventory that
isn’t selling, they are creating room for merchandise that will sell. They also express the
addition of premium brands that have had a significant impact on the Nordstrom Rack’s sales
performance. In 2022, these brands accounted for about half of all sales at the Rack. Which is a
major accomplishment for a store of this size. Additionally, they make up a significant
percentage of the on-order inventory for the first half of 2023. “By increasing our inventory
turnover, we can ensure that customers have a consistent supply of great brands, providing
newness and attracting customer engagement with each visit.” (Nordstrom, Inc., 2023).
VIII. Conclusion (minimum 1/4 page) 5 points
Nordstrom Inc.’s financial report analysis from 2022 to 2021 has revealed a number of trends. As
a result of an increase in current assets, the company’s liquidity position has improved.
Nordstrom’s financial position remains healthy, with consistently high current ratios and a
decreasing debt-to-equity ratio. However, it has also reduced its investment in long-term assets
and increased its current liabilities. A company’s financial ratios and trends can provide investors
with insights into its financial health and help them make informed investing decisions.
It is evident from a comparison of Nordstrom, Inc.’s balance sheet for fiscal years 2022 and
2021 that significant changes have occurred. The increase in current assets and inventory
indicates that the company can generate cash through its operations. It is the sale of certain assets
and the repayment of debt that has resulted in a decline in long-term assets and long-term
liabilities. The issuance of new shares is responsible for the decline in shareholders’ equity.
Overall, these changes highlight the financial health and strategic decision-making of Nordstrom,
Inc.
IX. References: Minimum of three. 6 points
About Us (no date) Nordstrom.com. Available at: https://www.nordstrom.com/browse/about
(Accessed: 04 December 2023).
Company History (no date) Nordstrom.com. Available at:
https://www.nordstrom.com/browse/about/company-history (Accessed: 03 December
2023).
JWN: Nordstrom Inc stock price quote – New York – bloomberg (2023) Bloomberg.com.
Available at: https://www.bloomberg.com/quote/JWN:US?embedded-checkout=true
(Accessed: 05 December 2023).
1
Shareholders’ Equity
Dieudonne Nlend
UMGC
ACCT 221
4/15/2024
2
Shareholders’ Equity
Retained earnings
Account name
Retained earnings
Balance current
Previous year
year
balance
2683
2430
$ Difference
% Difference
253
9.43%
Retained earnings refers to the profits that remain after the company repays its
operating costs, taxes, and dividends to shareholders. Retained earnings are reinvested in the
business for expansion and growth. Best Buy’s retained earnings increased by 9.43%, which
shows that the company is performing well. An increase in retained earnings implies that the
company managed to repay all its expenses and reinvest more than last year due to higher
revenues.
Additional Paid capital
Account name
Additional paid-in
Balance current
Previous year
year
balance
31
21
$ Difference
% Difference
10
32.25%
capital
Additional paid-in capital entails the excess amount that investors pay above the par
value of shares. The excess amount is received during stock issuance, and it shows the extra
cash that investors pay to acquire shares in the company. Best Buy realized an increase of
32.25% in its additional paid-in capital, implying that the investors paid an excess of $10
3
when buying shares this year compared to last year. The increase is a positive valuation for
the company as it receives more money when selling shares to investors.
Notes to the Financial Statement
Note 9: Stock Compensation Plans
Stock compensation plans refer to the practice of issuing shares to employees as part
of payment. Best Buy, in its 2020 incentive plan, authorized to issue up to 18.6 million shares
as part of its stock compensation plan to its workers (Best Buy, 2024). The awards are based
on time, market, and performance. In 2021, the company issued 126 shares for time-based
compensation, 19 shares for market-based, and none for performance-based.
4
References
Best Buy. (2024). 10K Report.
https://www.sec.gov/ix?doc=/Archives/edgar/data/764478/000076447824000010/bby
-20240203x10k.htm
Dieudonne Nlend
UMGC
Week 4 Report Income Statement
Trang Phan
4/9/2024
Introduction:
The Income Statement, often referred to as the Profit and Loss Statement (P&L), is a crucial
financial document that summarizes a company’s revenues and expenses over a specific period,
typically a quarter or a year. Its primary purpose is to provide insights into a company’s financial
performance and profitability, serving as a vital tool for both businesses and investors in
assessing the health and viability of an enterprise.
Key Components:
1. Revenues: Revenues represent the total amount of money earned from the sale of goods or
services during the reporting period. This figure reflects the core income-generating activities of
the business and is typically the top line of the income statement.
2. Cost of Goods Sold (COGS): COGS represents the direct costs associated with producing or
purchasing the goods sold by the company. This includes the cost of raw materials, labor, and
manufacturing overhead. Subtracting COGS from revenues gives the gross profit.
3. Gross Profit: Gross profit is the difference between revenues and the cost of goods sold. It
indicates how efficiently a company is producing and selling its products. Higher gross profit
margins suggest better efficiency in production and pricing strategies.
4. Operating Expenses: Operating expenses encompass all costs not directly related to the
production of goods, such as salaries, rent, utilities, marketing, and administrative expenses.
These expenses are incurred in the day-to-day operations of the business.
5. Operating Income: Operating income, also known as operating profit, is calculated by
subtracting operating expenses from gross profit. It reflects the profitability of the company’s
core business activities before considering interest and taxes.
6. Other Income/Expenses: Other income and expenses include non-operating items such as
interest income, interest expenses, gains/losses from asset sales, and extraordinary items. These
can significantly impact the bottom line of the income statement.
7. Net Income: Net income, also referred to as the bottom line or profit after tax, is the final
measure of profitability. It is calculated by subtracting taxes and other expenses from operating
income. Net income indicates the overall profitability of the business after all expenses have
been accounted for.
Effects on Overall Profitability:
Changes in the key components of the income statement directly impact the overall profitability
of the business. Increases in revenues or gross profit margins generally lead to higher
profitability, while higher operating expenses or other expenses may reduce profitability.
Understanding these components and their interplay is essential for analyzing a company’s
financial performance and making informed investment decisions.
Let’s analyze the trends in the Income Statement over a two-year period for two key account
balances. We’ll compare the current year (Year 2024) to the previous year and compute the dollar
difference as well as express the changes in percentage terms.
1. Revenues:
– Year 1: $43,452
– Previous Year: $46,298
– Dollar Difference: $46,298 – $43,452 = -$2,846 (a decrease)
– Percentage Change: (($43,452 – $46,298) / $46,298) * 100 = -6.15%
2. Operating Income:
– Year 1: $1,574
– Previous Year: $1,795
– Dollar Difference: $1,795 – $1,574 = $221 (a decrease)
– Percentage Change: (($1,574 – $1,795) / $1,795) * 100 = -12.28%
– The trend analysis provides insights into the financial performance of the company over the
two-year period.
– In terms of revenues, there was a decrease of $2,846 or 6.15% from the previous year. This
could indicate a decline in sales or a change in pricing strategies.
– Similarly, net income decreased by $221 or 12.28% from the previous year. This suggests that
the company’s profitability declined over the period, possibly due to increased expenses or lower
sales margins.
– Challenges and Limitations:
– While trends in the Income Statement are valuable for assessing financial performance, they
do not provide a complete picture of the company’s overall health. Other financial statements,
such as the Balance Sheet and Cash Flow Statement, should be analyzed in conjunction with the
Income Statement to gain a comprehensive understanding.
– Changes in accounting policies or one-time events can distort the trends observed in the
Income Statement. It’s essential to consider these factors when interpreting the data.
– External factors such as changes in the market, industry trends, or economic conditions may
also influence the company’s financial performance, complicating the analysis.
Interpretation
– Declines in revenues and net income suggest potential challenges in sales performance or cost
management.
– Negative percentage changes indicate a decrease compared to the previous year, signaling
potential areas for improvement or corrective action.
– While a decline in net income may raise concerns, it’s essential to investigate underlying
factors such as changes in expenses, margins, or investment activities.
In conclusion, analyzing trends in the Income Statement over time provides valuable insights
into a company’s financial performance.
Account name
revenue
income
3-Feb-24
43452
1574
28-Jan-23 difference difference in % explanation
46298
-2846
-6.15%
#NAME?
1795
-221
-12.28 – Declines in revenues and net inco
SUMMARY
Purpose of the Income Statement: The Income Statement, or Profit and Loss Statement, is a vital
financial document that summarizes a company’s revenues and expenses over a specific period. It
helps businesses and investors assess financial performance and profitability.
Key Components: The Income Statement consists of various components such as revenues, cost
of goods sold, gross profit, operating expenses, operating income, other income/expenses, and
net income. Changes in these components directly impact the overall profitability of the
business.
Trends Analysis: We analyzed trends in the Income Statement over a two-year period, focusing
on revenue and income income. Percentage changes were calculated to understand the direction
and magnitude of shifts in these key metrics.
Challenges and Limitations: Interpretation of the Income Statement faces challenges such as
contextual factors, differences in accounting methods, one-time events, timing of recognition,
and the necessity of considering non-financial metrics for a comprehensive understanding.
Final Thoughts:
The Income Statement serves as a critical tool for businesses and investors in assessing financial
health, performance, and profitability. It provides insights into revenue generation, cost
management, and overall operational efficiency. By analyzing trends over time, stakeholders can
identify patterns, opportunities, and areas for improvement. Despite challenges in interpretation,
the Income Statement remains indispensable for making informed decisions, strategic planning,
and evaluating the success of business endeavors. Its importance cannot be overstated in the
realm of financial analysis and decision-making, making it a cornerstone of corporate
transparency and investor confidence.
Bibliography:
Subramanyam, K. R. (2014). Financial statement analysis. McGraw-Hill.
Lin, S., Martinez, D., Wang, C., & Yang, Y. W. (2018). Is other comprehensive income reported
in the income statement more value relevant? The role of financial statement
presentation. Journal of Accounting, Auditing & Finance, 33(4), 624-646.
1
Balance Sheet
Dieudonne Nlend
UMGC
ACCT 221
4/16/2024
2
Balance Sheet
Introduction
A balance sheet summarises a company’s financial status, showing the assets,
liabilities, and equity at a specific point in time. The primary purpose of a balance sheet is to
assess a company’s financial health by providing insights into how the assets compare to
liabilities (Amond, 2024). Also, a balance sheet helps ascertain whether a company is
solvent, which is important for investors before purchasing shares. For instance, if the
company has borrowed more loans than it can repay, such information is provided in the
balance sheet. Similarly, a balance sheet is important for businesses as it can be used to
evaluate risk and return and make appropriate decisions as it reveals when the debts are
unsustainable.
Key Component
The key components of a balance sheet include assets, liabilities, and equity. Assets
are company resources whose value, such as cash or equipment, can be quantified (Amond,
2024). They are categorized as current and non-current assets. Current assets include the
resources that can be converted easily to cash within a year, such as inventory, accounts
receivables, and intangible assets. Non-current assets are long-term investments that cannot
easily be converted to cash, such as buildings, machinery, and equipment. Liabilities are
items that the company owes, which can also be classified as current or non-current (Amond,
2024). Some current liabilities include accounts payables and rent, while non-current
liabilities are long-term leases and loans. Shareholder’s equity represents the company’s net
worth, including stocks and retained earnings.
3
Analysis
Account name
Current
Previous $ Diff
Diff. in
Yr. Bal
Yr. Bal
A-B
%
A
B
939
1141
(202)
-21.51%
Explanation
Assets
Receivables, net
The trade receivables were reduced by 21.51%,
implying that most credit customers paid their
debt to the company.
Merchandise
4958
5140
-182
-3.67%
inventories
The inventories were reduced by 3.67%,
meaning that the company purchased less stock
during the year or sold most of its merchandise,
reducing the stock in the warehouse.
Liabilities
Accounts payable
4637
5687
-1050
-22.64%
The decrease in accounts payable shows that
the company repaid most of its suppliers during
the current year, reducing its cash/bank
balances.
Unredeemed gift card
253
274
-21
-8.3%
liabilities
The decrease in unredeemed gift cards implies
that most clients redeemed their gift cards
during the year compared to the previous one.
Equity
Retained earnings
2683
2430
253
9.43%
The increase in retained earnings shows that
the company reinvested most of its profits
4
during the year instead of paying more
dividends to shareholders.
Accumulated other
317
322
-5
-1.57%
The decline in other comprehensive income
comprehensive
implies that the other lines of business that
income
generate income had low revenues during the
year.
Conclusion
A balance sheet is a vital financial statement showing a business’s assets, liabilities,
and equity. Investors can use it to determine whether the company is in a healthy position
before investing. Also, businesses use a balance sheet to determine the risks involved before
accumulating more liabilities. Best Buy’s balance sheet shows that the receivables and
inventories were reduced, which shows that the company received more money from clients
and from selling most of its merchandise. The decrease in liabilities shows that the company
was solvent to repay its debt. The increase in retained earnings shows more reinvestment in
the business.
5
References
Best Buy. (2024). 10K Report.
https://www.sec.gov/ix?doc=/Archives/edgar/data/764478/000076447824000010/bby
-20240203x10k.htm
Amond, R. (2024, February 9). What is a balance sheet and why is it important? CNBC.
https://www.cnbc.com/select/what-is-a-balance-sheet/
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