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Target Finds Buyer for Half its Card Receivables

Article Analysis
Using the articles attached, create a 500-750 word analysis that includes the major point(s) made, application(s) to Financial Management, the concepts reinforced, and a summary.

The text for the course is Foundations of Financial Management (11th ed.) by Block, Hirt. Attached are the objectives we have already covered in the class as well as the articles.

Attachments

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Analysis:

The attached articles highlights the salient features of the proposed sale of approximately half of credit card receivables of Target corporation, primarily with the intent of generating liquidity for Target corporation. The infusion of equity by the investment partner will help Target in raising the much needed cash without too much reliance on debt instruments. It will help in balancing the overall capital structure of Target corporation. The current debt-equity of 1.11 will be favorably pushed towards 1 with the infusion of equity into the company by the prospective investment partner.

The inclusion of strategic partner will potentially be beneficial for Target in the long run as the new partner will provide both strategic as well as financial benefits to the company, thereby helping in improving the overall value of the firm in the eyes of investors.

The divestment will not only allow Target to reduce their risk exposure in this business, but will also allow them to focus on other strategic ...

Solution Summary

Financial Article Analysis - Target Finds Buyer for Half its Card Receivables

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