Author Question: Blockbuster Inc.Balance Sheet for year-ended Dec 31 ($000s)ASSETSYear 1Year ... (Read 39 times)

anshika · **on:** Apr 25, 2021

Blockbuster Inc.

Balance Sheet for year-ended Dec 31 ($000s)

ASSETS	Year 1	Year 2
Cash	194,200	200,200
Accounts Receivables	185,800	150,000
Inventory	242,200	202,900
Other Current Assets	177,300	163,300
Total Current Assets	799,500	716,400
Fixed Assets
Long Term Investments	214,100	159,500
PP&E	1,079,400	909,000
Goodwill	6,455,900	5,967,500
Total Fixed Assets	7,749,400	7,036,000
Total Assets	8,548,900	7,752,400
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts Payable	1,090,400	1,087,400
Short-term Debt	32,800	181,400
Total Current Liabilities	1,123,200	1,268,800
Long-term Debt	1,417,300	734,900
Total Liabilities	2,540,500	2,003,700
Shareholders' Equity
Common Stock	6,095,200	6,075,800
Retained Earnings	-86,800	-327,100
Total Stockholder Equity	6,008,400	5,748,700
Total Liabilities and Shareholders' Equity	8,548,900	7,752,400

Blockbuster Inc.

Income Statement for year-ended Dec 31 ($000s)

	Year 1	Year 2
Sales	4,969,100	5,157,600
COGS	2,036,000	2,420,700
SG&A	2,390,600	2,532,400
Depreciation	279,000	246,600
Amortization of Intangibles	180,100	176,100
Operating Income (Loss)	83,400	-218,200
Interest Expense	116,500	78,200
Income Before Tax	-33,100	-296,400
Income Tax Expense	45,400	-56,100
Net Income	-78,500	-240,300

Referring to the Blockbuster financial statements, what is the most important underlying reason for the change in ROE?
◦ Decrease in cost of goods sold
◦ Increase in debt caused the debt/equity ratio to rise
◦ Increase in sales resulted in an increase in product returns which caused inventory turnover to decline
◦ Increase in cost of goods sold caused a big drop in gross margin
◦ Decrease in debt

shaquita · **Reply #1 on:** Apr 25, 2021

A FREE account is required to view all solutions!

Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.

Answer Preview

Only 32% of students answer this correctly