Best buy ratios | Business & Finance homework help
Ratios measure financial performance, including profitability, liquidity and solvency. Best Buy’s ratios indicate that it has been performing relatively well in terms of profitability. In particular, their gross profit margin stands at 15%. This indicates they are able to make a healthy amount of sales. Their 10% return on assets also shows that they were able make the most of their assets and generate profit. In terms of liquidity, Best Buy’s current ratio (1.7) shows that they have enough short-term assets to cover their short-term liabilities should any unexpected expenses arise. The quick ratio, 0.9 shows that an important portion of their assets is liquid and easily convertible into cash.
These figures show that Best Buy is able to effectively manage its finances, which may indicate strong leadership and strategic planning for the future.