Best Buy Co. Inc. (NYSE:BBY)

Current Income Tax Expense

The current income tax expense displays variability over the analyzed periods. Starting at 408 million USD in early 2017, it peaked at 656 million USD in early 2018, followed by a significant reduction to 414 million USD in early 2019. It remained relatively stable around the 380-400 million USD range through 2019 and 2020, before increasing again to 615 million USD in early 2021 and slightly decreasing to 560 million USD in early 2022. Overall, the current tax expense exhibits cyclical fluctuations with notable spikes at two distinct periods.

Deferred Income Tax Expense

The deferred income tax expense demonstrates more pronounced volatility throughout the periods. Initially, it decreased from 201 million USD in early 2017 to 162 million USD in early 2018 and sharply declined to only 10 million USD by early 2019. A moderate recovery to 70 million USD occurred in early 2020, followed by a negative figure of -36 million USD in early 2021, indicating a deferred tax benefit rather than an expense. It then slightly increased to 14 million USD in early 2022. The pattern reflects episodic reversals and adjustments in deferred taxes, with significant fluctuations including a transition to a negative value in 2021.

Total Income Tax Expense

The total income tax expense, comprising both current and deferred components, generally mirrors the trends in the current tax expense due to its larger magnitude. It rose from 609 million USD in early 2017 to a peak of 818 million USD in early 2018, then substantially decreased to 424 million USD in early 2019. Following a modest increase to 452 million USD in early 2020, it escalated to 579 million USD in early 2021 before slightly declining to 574 million USD in early 2022. This pattern indicates a high correlation with current tax expense movements, while the deferred component introduces some variability.

Insights

The current income tax expense demonstrates strong cyclical behavior with significant peaks in 2018 and 2021, which may correspond to fluctuations in taxable income or changes in tax legislation. The deferred income tax expense is more irregular, showing sharp declines and even benefit recognition in 2021, suggesting the impact of timing differences in income recognition or tax attribute utilization. The total tax expense highlights these combined effects and indicates overall variability in tax obligations over the observed periods.

Federal Statutory Income Tax Rate

The federal statutory income tax rate exhibited a declining trend over the analyzed periods. Starting at 35% in January 2017, the rate decreased to 33.7% in February 2018. A significant drop occurred in February 2019, where the rate fell to 21%, and this rate was maintained consistently through to January 2022.

Effective Income Tax Rate

The effective income tax rate displayed more variability during the same timeframe. Initially, it was close to the statutory rate at 33.5% in January 2017, before rising sharply to 45% in February 2018, exceeding the statutory rate at that time. Subsequently, it decreased markedly to 22.4% in February 2019, aligning more closely with the lowered statutory rate of 21%. Over the following years, the effective rate fluctuated slightly, increasing to 24.3% in January 2021, before declining again to 19% in January 2022.

Observations and Insights

The consistent decline in the federal statutory income tax rate after 2018 reflects broader tax reforms affecting the company during this period. The effective income tax rate's volatility suggests that company-specific factors such as tax planning strategies, temporary differences, or jurisdictional tax variations influenced the actual tax burden differently from the statutory baseline. Notably, the effective rate was substantially higher than the statutory rate in 2018, which may indicate non-recurring items or differing tax treatments that year. In the later years, the effective rate generally hovered near the statutory rate, implying alignment or effective tax management.

The financial data exhibits several notable trends and shifts over the reviewed periods.

Deferred Revenue

Deferred revenue decreased from 104 million in 2017 to 52 million in 2019, followed by a gradual recovery to 76 million by 2022. This suggests fluctuations in the timing or recognition of revenues across these years.

Compensation and Benefits

There is a marked increase in compensation and benefits expense, from 43 million in 2017 to 156 million in 2022, peaking notably in 2021. This upward trend may reflect growth in personnel costs or expansion of the workforce.

Stock-Based Compensation

Stock-based compensation remained relatively stable over the period, slightly declining from 64 million in 2017 to around 31 million in 2022, indicating consistent use of equity incentives but with modest reductions.

Other Accrued Expenses

Other accrued expenses generally declined from 76 million in 2017 to 37 million in 2020, but spiked again to 64 million in 2021 before decreasing to 46 million in 2022, suggesting variability in accrued liabilities.

Operating Lease Liabilities and Assets

Operating lease liabilities were not reported until 2020, when they appeared at 734 million, slightly decreasing thereafter. Similarly, operating lease assets were first reported in 2020, with negative values around -692 million, which remained fairly stable. This likely results from accounting standard changes requiring the capitalization of leases.

Goodwill and Intangibles

Goodwill and intangibles showed a decrease over time. The initial figures reported in 2017 and 2018 (210 million and 102 million, respectively) are followed by negative values starting in 2019 through 2022, indicating amortization, impairment, or reclassification effects.

Loss and Credit Carryforwards

Loss and credit carryforwards were relatively stable, hovering around 120-143 million across the years, with a slight upward trend from 127 million in 2020 to 143 million in 2021 and 2022, suggesting accumulated tax attributes.

Other Items

Other categories exhibited declines, with initial values of 150 million in 2017 decreasing steadily to 45 million in 2022, reflecting reductions in miscellaneous assets or expenses.

Deferred Tax Assets and Related Items

Deferred tax assets showed considerable growth from 770 million in 2017 to over 1200 million in 2022, while the valuation allowance became more negative over the same period, increasing from -94 million to -128 million. The deferred tax assets after valuation allowance closely follow the growth trend, indicating an overall increase. Deferred tax liabilities fluctuated, with a significant increase in negative values around 2020 (-1029 million) and subsequent stability thereafter. Net deferred tax assets (liabilities) saw a decline from a positive 317 million in 2017 to slightly negative values in 2020, followed by a recovery near zero by 2022, implying shifts in deferred tax positions.

Inventory and Property and Equipment

Inventory showed consistent negative values throughout, with a notable decrease in magnitude from -97 million in 2017 to around -24 million in 2022, indicating possible reductions in inventory or changes in classification. Property and equipment also exhibited increasing negative values, from -240 million in 2017 to -270 million in 2022, representing continued investment or depreciation patterns.

The financial data reveals notable changes in the deferred tax assets and liabilities over the six-year period from 2017 to 2022. The deferred tax assets show a significant declining trend from 2017 through 2020, followed by a modest recovery in the subsequent two years. In contrast, deferred tax liabilities appear sporadically in the data, with values reported only in 2020 and 2022.

Deferred Tax Assets

Beginning at $317 million in 2017, deferred tax assets decreased sharply to $159 million in 2018 and further plummeted to $55 million in 2019. This downward trajectory continued, reaching a low of $9 million by 2020. Following this decline, there was a modest increase to $17 million in 2021 and $25 million in 2022, indicating a slight recovery but remaining substantially below the initial levels observed in 2017.

Deferred Tax Liabilities

Deferred tax liabilities were not reported in the earlier years (2017–2019). They emerged at $29 million in 2020, suggesting the recognition of such liabilities during that fiscal period. However, the value decreased to $22 million by 2022, which may reflect changes in tax positions or the revaluation of liabilities.

Overall, the data indicate a marked reduction in deferred tax assets over the initial four-year period with a slight rebound thereafter, while deferred tax liabilities became notable only in the later years with a moderate decline observed towards 2022. These trends may reflect underlying changes in tax planning, asset valuation, or tax regulations affecting the company's deferred tax positions.

Total Assets

Reported total assets showed a slight decline from 13,856 million USD in early 2017 to 12,901 million USD in early 2019, followed by a significant increase peaking at 19,067 million USD in early 2021, before decreasing to 17,504 million USD in early 2022. Adjusted total assets followed a similar pattern, with values closely mirroring reported totals, indicating minor adjustments related to income tax effects.

Total Liabilities

Reported total liabilities increased steadily over the period under review, rising from 9,147 million USD in early 2017 to 14,484 million USD in early 2022. Adjusted total liabilities closely track reported figures, except for a marginal difference in early 2020 and 2022, where adjusted liabilities were slightly lower than reported, reflecting the impact of deferred income tax adjustments.

Shareholders’ Equity

Reported shareholders’ equity showed a downward trend from 4,709 million USD in early 2017 to 3,306 million USD in early 2019, then a recovery to 4,587 million USD in early 2021, before declining again to 3,020 million USD by early 2022. Adjusted equity values mirror this trend with small discrepancies, signifying consistent adjustments for income tax effects over the years.

Net Earnings

Reported net earnings demonstrated fluctuations but generally increased over the period, starting at 1,228 million USD in early 2017, dipping to 1,000 million USD in early 2018, then rising substantially to 2,454 million USD by early 2022. Adjusted net earnings consistently exceed reported values, with the difference widening notably in recent years, suggesting that deferred income tax adjustments positively affected reported profitability.

Overall Insights

The data reflects a company experiencing asset growth and increased liabilities over the recent years, with equity presenting volatility likely tied to earnings performance and tax-related adjustments. The continuous divergence between adjusted and reported net earnings suggests that deferred income tax has a meaningful impact on the financial results, enhancing the perceived profitability when such adjustments are considered. The pattern of adjustments is relatively consistent for assets, liabilities, and equity, indicating systematic treatment of tax-related timing differences in financial reporting.

Net Profit Margin

The reported net profit margin exhibited a generally increasing trend over the periods analyzed, rising from 3.12% in 2017 to 4.74% in 2022. The adjusted net profit margin followed a similar pattern but consistently showed slightly higher values than the reported figures, starting at 3.63% in 2017 and reaching 4.77% in 2022. This indicates an improving profitability trend when accounting for deferred income tax adjustments.

Total Asset Turnover

The reported total asset turnover ratio increased from 2.84 in 2017 to a peak of 3.32 in 2019, then declined to 2.48 in 2021 before recovering to 2.96 in 2022. The adjusted figures mirrored these trends closely with slightly higher values at the beginning of the period but converging thereafter. This suggests some fluctuation in the efficiency of asset utilization, with a dip during the 2020-2021 period but a recovery in the latest year.

Financial Leverage

Financial leverage showed a steady upward trend over the years. The reported financial leverage ratio increased from 2.94 in 2017 to 5.80 in 2022, indicating a rising reliance on debt or other liabilities to finance assets. The adjusted leverage ratios were slightly higher but followed the same growth pattern, moving from 3.08 to 5.79. This increase suggests a progressively more leveraged capital structure.

Return on Equity (ROE)

Reported ROE displayed significant volatility, with an increase from 26.08% in 2017 to a peak of 44.29% in 2020, declining slightly in 2021, and then dramatically increasing to 81.26% in 2022. The adjusted ROE followed a similar trajectory, indicating consistency between reported and adjusted figures. The sharp rise in 2022 reflects substantial improvements in equity profitability, potentially influenced by leverage effects or operational enhancements.

Return on Assets (ROA)

The reported ROA rose from 8.86% in 2017 to 11.35% in 2019, then decreased to 9.43% in 2021 before increasing significantly to 14.02% in 2022. The adjusted ROA tracked these movements closely, with slightly higher initial values but converging by the end of the period. This pattern indicates fluctuations in asset profitability, with notable improvement in the most recent year.

Overall Insights

The financial performance indicators, when adjusted for deferred income tax effects, consistently showed slightly better profitability and efficiency metrics compared to reported figures, although the overall trends remained the same. Margins and returns demonstrated positive growth trajectories over the six-year period, with some intermediate fluctuations linked to asset utilization and operational efficiency. A marked increase in financial leverage alongside greatly improved ROE in the final year suggests an intensified use of leverage to amplify equity returns. The dip in asset turnover around 2020-2021 may reflect operational challenges, with recovery evident in the subsequent year.

Reported Net Earnings

Reported net earnings demonstrate an overall upward trend from 2017 to 2022. Starting at $1,228 million in 2017, earnings declined to $1,000 million in 2018, recovering strongly thereafter. Earnings increased consistently each year from 2018 onward, reaching $2,454 million in 2022, indicating strong improvements in profitability over the period.

Adjusted Net Earnings

Adjusted net earnings follow a similar trajectory as reported net earnings, with an initial decline from $1,429 million in 2017 to $1,162 million in 2018. Subsequently, adjusted earnings showed continuous growth, peaking at $2,468 million in 2022. The adjustment appears to have a modest upward effect on earnings figures, especially noticeable in earlier years.

Reported Net Profit Margin

The reported net profit margin declined from 3.12% in 2017 to 2.37% in 2018, indicating a drop in profitability relative to sales during that period. Following this decline, the margin improved gradually each year, rising to 4.74% in 2022. This positive progression suggests enhanced efficiency and profitability in the company’s operations over time.

Adjusted Net Profit Margin

Adjusted net profit margin exhibits a pattern consistent with the reported margin, starting at 3.63% in 2017 and dipping to 2.76% in 2018. Afterward, it increased steadily, reaching 4.77% by 2022. The adjustment increases the margin figures slightly compared to the reported values, reflecting the impact of removing deferred income tax effects and providing a cleaner measure of profitability.

Overall Insights

The data reflects a company that experienced a temporary setback in both earnings and profit margins in 2018 but achieved sustained growth in subsequent years. Both reported and adjusted metrics demonstrate improved profitability and operational efficiency through 2022. The close alignment between reported and adjusted figures, with slight upward adjustments, highlights consistent financial performance with manageable impacts from income tax adjustments.

The analysis of the annual reported and deferred income tax adjusted financial data reveals distinct trends in both asset measures and asset turnover ratios over the examined periods.

Total Assets

The reported total assets display an initial decline from $13,856 million in 2017 to $12,901 million in 2019, followed by a notable increase peaking at $19,067 million in 2021. In 2022, there is a decline to $17,504 million, yet the asset base remains substantially higher than the early years. Adjusted total assets follow a very similar pattern, starting at $13,539 million in 2017, decreasing slightly to $12,846 million in 2019, rising significantly to $19,050 million in 2021, before dropping to $17,479 million in 2022. The adjusted values are consistently marginally lower than the reported figures, indicating the impact of deferred income tax adjustments reduces the asset base slightly but tracks closely overall.

Total Asset Turnover Ratios

The reported total asset turnover ratio increases from 2.84 in 2017 to a peak of 3.32 in 2019, indicating improved efficiency in generating sales per unit of asset during the initial years. However, this ratio declines sharply to 2.8 in 2020 and further to 2.48 in 2021, suggesting a decrease in asset utilization efficiency in these periods. In 2022, the turnover ratio rebounds somewhat to 2.96, reflecting a partial recovery. The adjusted total asset turnover ratios closely mirror the reported ratios in each corresponding year, with slightly higher values in the early years and identical values from 2020 onwards, indicating that deferred income tax adjustments have minimal impact on turnover measurement.

Overall, the data show a period of contraction in assets in the early years followed by rapid expansion until 2021, then a reduction in 2022. Correspondingly, asset turnover improved initially but then weakened during the asset growth phase before showing signs of recovery in the latest period. The close alignment between reported and adjusted figures implies that deferred income tax effects are consistent and have a limited influence on the key asset metrics and efficiency ratios examined.

The financial data reveals several notable trends over the six-year period ending in January 2022. Total assets, both reported and adjusted for deferred income taxes, exhibit a general increase until the fiscal year 2021, followed by a decline in the subsequent year. Specifically, reported total assets rose from approximately 13.9 billion US dollars in 2017 to a peak of about 19.1 billion US dollars in 2021, before decreasing to 17.5 billion US dollars in 2022. Adjusted total assets followed a nearly identical pattern, indicating consistency between reported and deferred tax adjusted figures.

Shareholders’ equity shows a contrasting pattern with both the reported and adjusted values experiencing a significant drop from 2017 through 2019, decreasing from about 4.7 billion to around 3.3 billion US dollars. This decline continued in 2022 after a temporary recovery in 2021, where equity increased to nearly 4.6 billion US dollars. By 2022, equity returned to approximately 3.0 billion US dollars, suggesting volatility and reduced net asset value over the period.

Financial leverage demonstrates a steady upward trend, indicating a growing reliance on debt financing relative to equity. Reported financial leverage started at 2.94 in 2017 and increased to 5.8 by 2022, more than doubling over the six years. Adjusted financial leverage mirrors this progression closely, confirming consistency after adjustments. The consistent rise in leverage suggests increasing financial risk and a potential strategy shift towards higher debt usage, especially notable in the final year with a sharp increase from 4.16 in 2021 to 5.8 in 2022.

Total Assets

Increased steadily from 2017 to 2021, peaking in 2021, followed by a decline in 2022.

Adjusted values were closely aligned with reported figures, indicating minor impact of deferred tax adjustments.

Shareholders’ Equity

Declined sharply from 2017 to 2019, recovered somewhat in 2021, but dropped again in 2022.

Adjusted equity figures tracked reported equity closely, suggesting consistent tax-related adjustments.

Financial Leverage

Increased continuously over the entire period, reflecting rising debt levels or decreasing equity.

Marked acceleration in leverage occurred between 2021 and 2022, highlighting increased financial risk.

Overall, the data indicates growth in total assets with corresponding pressure on equity, resulting in increasing leverage ratios. This trend denotes an enhanced use of debt financing and heightened financial risk exposure in recent years.

The financial data over the six-year period reveals various trends in earnings, equity, and return on equity (ROE), both reported and adjusted for annual reported and deferred income tax.

Net Earnings

Reported net earnings demonstrate a generally positive trajectory, increasing from 1,228 million USD in 2017 to 2,454 million USD in 2022, representing almost a doubling over the period. Notable dips occurred in 2018 with earnings decreasing to 1,000 million USD from the previous year, followed by steady increases each subsequent year. Adjusted net earnings follow a broadly similar pattern, though consistently higher than reported earnings, indicating the impact of adjustments related to income tax considerations.

Total Shareholders’ Equity

Reported total shareholders’ equity exhibits a declining trend from 4,709 million USD in 2017 to 3,020 million USD in 2022. The most significant drop is observable between 2017 and 2018, and a volatile pattern continues with some recovery in 2021 before falling again. Adjusted shareholders’ equity mirrors this pattern closely, with slight differences in amounts, reflecting the effect of adjustments on equity values related to tax items.

Return on Equity (ROE)

Reported ROE shows substantial variability and a marked increase over the period, from 26.08% in 2017 to 81.26% in 2022. This indicates improving profitability relative to shareholders’ equity, although the large leap in the final year suggests unusual factors or significant changes in earnings or equity base. Adjusted ROE follows the same pattern but remains consistently slightly higher than reported ROE, implying that the adjustments lead to a more favorable view of return efficiency.

Overall, the data reflects an environment of improving earnings performance accompanied by a declining equity base, resulting in heightened ROE figures. This may suggest increased financial leverage or share repurchases impacting equity. The adjusted figures consistently portray a slightly more robust financial performance, emphasizing the influence of tax-related adjustments on key financial metrics.

The financial data reveals several key trends over the six-year period. Both reported and adjusted net earnings demonstrate an overall upward trajectory, with reported net earnings increasing from 1,228 million USD in 2017 to 2,454 million USD in 2022, and adjusted net earnings rising from 1,429 million USD to 2,468 million USD in the same period. This indicates consistent growth in earnings, with adjusted figures slightly higher than reported earnings each year, suggesting adjustments have a positive impact on net earnings.

Total assets, both reported and adjusted, show some variability but overall growth. Reported total assets decreased marginally from 13,856 million USD in 2017 to 12,901 million USD in 2019, followed by a significant increase to 19,067 million USD in 2021 and a subsequent decline to 17,504 million USD in 2022. Adjusted total assets follow a similar pattern, confirming the reliability of asset valuation adjustments. This pattern indicates some fluctuations likely related to asset management or acquisitions during the period.

Return on Assets (ROA), both reported and adjusted, exhibits notable fluctuations. Reported ROA declined from 8.86% in 2017 to 7.66% in 2018 but then rose significantly to 11.35% in 2019. Subsequently, it decreased slightly to 9.43% in 2021 before jumping to 14.02% in 2022. Adjusted ROA follows a comparable pattern, starting higher at 10.55% in 2017, dipping to 9.01% in 2018, and then increasing to reach 14.12% by 2022. These trends suggest improved efficiency in asset utilization over time, particularly apparent in the most recent year.

Overall, the data reflects positive growth in profitability and asset efficiency, supported by adjustments that enhance net earnings and ROA metrics. The upward trends in reported and adjusted earnings alongside substantial ROA improvement in the final years highlight strengthening financial performance despite some fluctuations in total assets.

Net Earnings

Both reported and adjusted net earnings show consistent growth, with adjusted earnings consistently exceeding reported earnings.

Total Assets

Reported and adjusted total assets fluctuate, with a decrease early on, a peak in 2021, then a slight decline in 2022, indicating active asset management.

Return on Assets (ROA)

ROA displays variability but improves substantially by 2022, reflecting enhanced asset utilization and operational efficiency.