Costco Interest Expense
For TGT and WMT, interest expense was taken as the gross total (including interest income). But, for COST only interest expense is included. Should that number be 144 instead of 34? (143.533 rounded, which is the interest expense (34,437) and interest income (109,096) summed to get gross interest)

Averaging When Mixing IS and BS Items
It was my understanding, through both the video and the footnotes on the slides, that we were to average inventory, A/R and A/P balances for the Days Outstanding Ratios. When is it applicable to average and when are the exceptions? Thank you!

Current Liabilities
When we calculate the liquidity ratios, would it make sense to exclude the short-term interesting-bearing liabilities from the current liabilities? So, e.g., instead of using $48,826 for WMT, we could use $40,178. I've seen this done a couple of times and wanted to make sure what is the right way. S... When we calculate the liquidity ratios, would it make sense to exclude the short-term interesting-bearing liabilities from the current liabilities? So, e.g., instead of using $48,826 for WMT, we could use $40,178. I've seen this done a couple of times and wanted to make sure what is the right way. Specially because we are saying that we want to understand "working capital" and not "financing decisions" with these ratios (and one may think that short-term borrowings, etc. would fall on the "financing decision" category). Although I understand that those are still current outflows that you have to meet... Thanks a lot! Read More

TGT Debt for ROC
The video states using 8872 and ending up with a 12.4% for ROC % . Is that an error from the instructor?

Liabilities and Interest Expense
In the "Financial Statement Analysis" video, he says that we should only include "Interest-Bearing Negotiated Securities" (IBNS's) as Liabilities in the A=L+OE equation because we are only interested in capital structure. My first question is why are IBNS's any different from ot... In the "Financial Statement Analysis" video, he says that we should only include "Interest-Bearing Negotiated Securities" (IBNS's) as Liabilities in the A=L+OE equation because we are only interested in capital structure. My first question is why are IBNS's any different from other debt and debentures? If I issue a bond or note to raise $100k and use it to buy equipment, how is that different from going to a leasing company to finance the same $100 of equipment? (other than the first scenario produces a debenture that has claim on all the assets of the business in the event of default) Do they not both equate to capital structure in the sense that they both financed PP&E for the company? My second question is: assuming that we are only supposed to include IBNS's in the liabilities, does that mean the line item for interest expense on the Income Statement should only include interest relating to IBNS's? If not, how do we resolve the difference between only having IBNS's on the BS and all interest on the income statement? If so, please explain why? and where then would the other debt or debenture income and expense be posted on the income statement? Thanks Rick Read More