An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.

Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)
Adjustments to Financial Statements for Operating Leases
Adjusted Financial Ratios for Operating Leases (Summary)
Adjusted Total Asset Turnover
Adjusted Debt to Equity
Adjusted Return on Assets (ROA)

Best Buy Co. Inc., future operating lease payments (before adoption of FASB Topic 842)

US$ in millions

	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
Total undiscounted future operating lease payments	—	—	—	2,961)	3,046)	3,125)
Discount rate¹	—	—	—	4.10%	4.26%	6.88%

Total present value of future operating lease payments	—	—	—	2,615)	2,695)	2,575)

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

¹ Weighted average discount rate, finance leases

2019 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 4.10%
2020	700)	2020	700)	672)
2021	648)	2021	648)	598)
2022	513)	2022	513)	455)
2023	371)	2023	371)	316)
2024	253)	2024	253)	207)
2025 and thereafter	476)	2025	253)	199)
		2026	223)	168)
Total:	2,961)		2,961)	2,615)

Based on: 10-K (reporting date: 2019-02-02).

2018 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 4.26%
2019	791)	2019	791)	759)
2020	669)	2020	669)	615)
2021	533)	2021	533)	470)
2022	396)	2022	396)	335)
2023	257)	2023	257)	209)
2024 and thereafter	400)	2024	257)	200)
		2025	143)	107)
Total:	3,046)		3,046)	2,695)

Based on: 10-K (reporting date: 2018-02-03).

2017 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 6.88%
2018	803)	2018	803)	751)
2019	676)	2019	676)	592)
2020	546)	2020	546)	447)
2021	411)	2021	411)	315)
2022	285)	2022	285)	204)
2023 and thereafter	404)	2023	285)	191)
		2024	119)	75)
Total:	3,125)		3,125)	2,575)

Based on: 10-K (reporting date: 2017-01-28).

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Best Buy Co. Inc., adjustments to financial statements

US$ in millions

	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
Adjustment to Total Assets
Total assets (as reported)	17,504)	19,067)	15,591)	12,901)	13,049)	13,856)
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	—)	—)	—)	2,615)	2,695)	2,575)
Total assets (adjusted)	17,504)	19,067)	15,591)	15,516)	15,744)	16,431)
Adjustment to Total Debt
Total debt (as reported)	1,229)	1,377)	1,271)	1,388)	1,355)	1,365)
Add: Operating lease liability (before adoption of FASB Topic 842)²	—)	—)	—)	2,615)	2,695)	2,575)
Add: Current portion of operating lease liabilities	648)	693)	660)	—)	—)	—)
Add: Long-term operating lease liabilities, excluding current portion	2,061)	2,012)	2,138)	—)	—)	—)
Total debt (adjusted)	3,938)	4,082)	4,069)	4,003)	4,050)	3,940)

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

^{1, 2} Equal to total present value of future operating lease payments.

Best Buy Co. Inc., Financial Data: Reported vs. Adjusted

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Best Buy Co. Inc., adjusted financial ratios

	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
Total Asset Turnover¹
Reported total asset turnover	2.96	2.48	2.80	3.32	3.23	2.84
Adjusted total asset turnover	2.96	2.48	2.80	2.76	2.68	2.40
Debt to Equity²
Reported debt to equity	0.41	0.30	0.37	0.42	0.38	0.29
Adjusted debt to equity	1.30	0.89	1.17	1.21	1.12	0.84
Return on Assets³ (ROA)
Reported ROA	14.02%	9.43%	9.88%	11.35%	7.66%	8.86%
Adjusted ROA	14.02%	9.43%	9.88%	9.44%	6.35%	7.47%

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

¹ See details »

² See details »

³ See details »

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Best Buy Co. Inc. adjusted total asset turnover ratio deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.
Adjusted debt to equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Best Buy Co. Inc. adjusted debt to equity ratio improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Best Buy Co. Inc. adjusted ROA deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.

Best Buy Co. Inc., Financial Ratios: Reported vs. Adjusted

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	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
As Reported
Selected Financial Data (US$ in millions)
Revenue	51,761)	47,262)	43,638)	42,879)	42,151)	39,403)
Total assets	17,504)	19,067)	15,591)	12,901)	13,049)	13,856)
Activity Ratio
Total asset turnover¹	2.96	2.48	2.80	3.32	3.23	2.84
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Revenue	51,761)	47,262)	43,638)	42,879)	42,151)	39,403)
Adjusted total assets	17,504)	19,067)	15,591)	15,516)	15,744)	16,431)
Activity Ratio
Adjusted total asset turnover²	2.96	2.48	2.80	2.76	2.68	2.40

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

2022 Calculations

¹ Total asset turnover = Revenue ÷ Total assets
= 51,761 ÷ 17,504 = 2.96

² Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 51,761 ÷ 17,504 = 2.96

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Best Buy Co. Inc. adjusted total asset turnover ratio deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.

	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
As Reported
Selected Financial Data (US$ in millions)
Total debt	1,229)	1,377)	1,271)	1,388)	1,355)	1,365)
Total Best Buy Co., Inc. shareholders’ equity	3,020)	4,587)	3,479)	3,306)	3,612)	4,709)
Solvency Ratio
Debt to equity¹	0.41	0.30	0.37	0.42	0.38	0.29
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt	3,938)	4,082)	4,069)	4,003)	4,050)	3,940)
Total Best Buy Co., Inc. shareholders’ equity	3,020)	4,587)	3,479)	3,306)	3,612)	4,709)
Solvency Ratio
Adjusted debt to equity²	1.30	0.89	1.17	1.21	1.12	0.84

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

2022 Calculations

¹ Debt to equity = Total debt ÷ Total Best Buy Co., Inc. shareholders’ equity
= 1,229 ÷ 3,020 = 0.41

² Adjusted debt to equity = Adjusted total debt ÷ Total Best Buy Co., Inc. shareholders’ equity
= 3,938 ÷ 3,020 = 1.30

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Solvency ratio	Description	The company
Adjusted debt-to-equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Best Buy Co. Inc. adjusted debt-to-equity ratio improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.

	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
As Reported
Selected Financial Data (US$ in millions)
Net earnings	2,454)	1,798)	1,541)	1,464)	1,000)	1,228)
Total assets	17,504)	19,067)	15,591)	12,901)	13,049)	13,856)
Profitability Ratio
ROA¹	14.02%	9.43%	9.88%	11.35%	7.66%	8.86%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net earnings	2,454)	1,798)	1,541)	1,464)	1,000)	1,228)
Adjusted total assets	17,504)	19,067)	15,591)	15,516)	15,744)	16,431)
Profitability Ratio
Adjusted ROA²	14.02%	9.43%	9.88%	9.44%	6.35%	7.47%

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

2022 Calculations

¹ ROA = 100 × Net earnings ÷ Total assets
= 100 × 2,454 ÷ 17,504 = 14.02%

² Adjusted ROA = 100 × Net earnings ÷ Adjusted total assets
= 100 × 2,454 ÷ 17,504 = 14.02%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Best Buy Co. Inc. adjusted ROA deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.

Best Buy Co. Inc. (NYSE:BBY)

Analysis of Operating Leases

Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)

Adjustments to Financial Statements for Operating Leases

Best Buy Co. Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios for Operating Leases (Summary)

Best Buy Co. Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Debt to Equity

Adjusted Return on Assets (ROA)