Financial Analysis Paper Zeyuan Liu
Company Profile Target Corporation was founded in 1902 and is headquartered in Minneapolis, Minnesota. Target Corporation operates general merchandise and food discount stores in the United States. It operates as two reportable segments: Retail and Credit Card. The company offers household essentials, including electronics, music, and toys; apparel and accessories; home furnishings as well as seasonal merchandise. It also sells its merchandise under private-label brands, such as Archer Farms, etc. Target Corporation operates in-store amenities, such as Target Caféand Target Clinic as well. Its marketing strategy includes selling its products on its online shopping site Target.com and its network of
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As discussed earlier, the liquidity and solvency ratios show that, although Target holds large amounts of free cash flow to deal with risk and possible acquisition, it still has a high debt to asset ratio.
Appendix A Ratio Analysis
Profitability ratio Earnings Per Share Book Value per Share Profit margin on sales Return on assets Return on shareholders’ equity Return on Investment: DuPont Model (ROI) Liquidity Ratio Current ratio Quick ratio (acid test) Working Capital 2009 2008 2007
$3.64 $21.16 4.26% 6.24% 16.56%
6.02%
$1.36 $18.73 3.14% 5.16% 14.27%
4.37%
$2.87 $19.89 4.87% 6.27% 15.58% 5.78%
2009 1.63 0.77 $7,097 2009 2.61times 6.03times 9.67times 9.87times 1.52times 2009 0.66 1.93 0.18 $2,200
2008 1.66 0.82 $6,976 2008 2.43times 5.89times 8.83times 8.64times 1.38times 2008 0.69 2.22 0.15 $864
2007 1.42 0.78 $7,193 2007 2.56times 6.27times 9.34times 8.86times 1.47times 2007 0.67 1.82 0.16 $2,450
Asset Management
Fixed Assets Turnover Inventory Turnover Accounts Receivables Turnover Receivables Turnover Ratio Total Assets Turnover Solvency Total Debt to Asset Ratio Total Debt to Equity Ratio Cash Debt Coverage Ratio Free Cash Flow
(Millions)
Appendix B Analysis of Results of Operations
Retail Segment Retail Segment Results (millions) Sales Cost of sales Gross margin SG&A expenses (a) EBITDA
4. How much money was ADM losing per month in the lysine business because of the virus? 7million per month
Target Corporation was founded in 1902 in Minneapolis as the Dayton Dry Goods Company, though the first Target store was opened in 1962 in nearby Roseville, Minnesota. Not until 1995, was the first Super Target was built. In 1999 Target launched their website Target.com. Target grew and eventually became the largest division of Dayton Hudson Corporation, culminating in the company being renamed as Target Corporation in August 2000. The Corporation became a major retailing power house with $52.6 billion in revenues from 1,397 stores in 47 states by 2005. Realizing a 12.1% sales growth over the past five years target had announced plans to continue its growth by opening
3. SciTronics had a total of $75000 of capital at year-end 2008 and earned, before
In the year 2016 I inputted an amount of $6400.00 from January through August. From September through December an amount of $2400.00. For a total of $8800.00
Note Exhibit 3, Year 2 cash flows, the “add total change in cash” is an incorrect number. It should be $1,371,350.
|. Its net profit margins, ROE, and amount of cash on hand to make interest payments
$15.3 million. The return on average invested capital in 1984 was around 20%. Over the past five
Using the data provided in Exhibit 1, we can get free cash flow of year 2007-2011 would be $21.24 million, $26.73 million, $22.10 million, $25.47 million, and $29.54 million respectively. The computation is showed in Exhibit 1($ in thousands).
Target Corporation is having a very stable financial policy and dividend policy. From the historical financial data, Target had debt $11,044M, $11,202M, $10,599M, $17,471M, and $19,882M in the year of 2005,2006,2007,2008, and 2009 respectively. The long-term debt/equity ratio rises from 69.34% to 108%.
5.000,00 $ 7.500 151.250 20 35.000,00 $ 12.500 321.250 26 $ 58,20 $ 110.000,00 4.000 333.500 83 115,38
Current ratio Cash Ratio Parts Inventory Turnover in Days WP Inventory Turnover in Days FG Inventory Turnover in Days A/R Turnover in Days A/P Turnover in Days Cash Conversion Cycle Fixed Assets Turnover Total assets Turnover Debt Ratio LT Debt total Capitalization Times Interest Earned Cash Flow Coverage Gross profit Margin Operating profit Margin Net Profit Margin Return on Assets Return on Equity
Also, according to its leverage ratios, the company’s debts are not only very high, but are also increasing. Its decreasing TIE ratio indicates that its capability to pay interests is decreasing. The company’s efficiency ratios indicate that despite the fact that its fixed assets are increasingly being utilized to generate sales during the years 1990-1991 as indicated by its increasing fixed asset turnover ratio, the decreasing total assets turnover indicate that overall the company’s total assets are not efficiently being put to use. Thus, as a whole its asset management is becoming less efficient. Last but not the least, based on its profitability ratios, the company’s ability to make profit is decreasing.
|Table 2 |Quick |Current Ratio|Accounts collection period of accounts |Average number of days inventory |
Landry’s Debt to Asset ratio also increased from year 2002 to 2003. In 2002 Landry had a debt to asset ratio of 0.39. In 2003 Landry’s debt to asset ratio increased to 0.45. While both numbers are acceptable and considerably low, the increase from 2002 to 2003 could influence potential investors to not invest in Landry’s stock. This increase also suggests that Landry’s debt also increased from 2002 to 2003. Overall, while there was a slight increase from 2002 to 2003 Landry’s still had a good debt to asset ratio. We think that a contributing factor to the debt
* A firm is financially liquid if it is able to pay its bills on time