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Financial Ratio Analysis Report - Target Corporation

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Complete and submit a 1,400-2,100-word Financial Ratio Analysis Report following the guidelines below:
a. Obtain financial information for a Fortune 500 company. You should begin by obtaining the annual reports for the company (include them with your report). .
b. Prepare a 3 year trend table of the financial ratios presented in Table 1 for your selected company. Include a brief rationale for each ratio you have calculated.
c. Compare the ratios calculated against industry averages.
d. For each ratio calculated, write a paragraph interpreting the trends and identify strengths and weaknesses.
e. Assess the financial condition of the company.
f. Discuss other factors beyond the ratios that need to be considered in the assessment of the company's health.
g. Discuss how your assessment compares to what management is telling the shareholders in the annual report.
h. Identify possible problems you see this company facing in the next year that would require further analysis and exploration.

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Complete and submit a 1,400-2,100-word Financial Ratio Analysis Report following the guidelines below:
a. Obtain financial information for a Fortune 500 company. You should begin by obtaining the annual reports for the company (include them with your report). .
b. Prepare a 3 year trend table of the financial ratios presented in Table 1 for your selected company. Include a brief rationale for each ratio you have calculated.
c. Compare the ratios calculated against industry averages.
d. For each ratio calculated, write a paragraph interpreting the trends and identify strengths and weaknesses.
e. Assess the financial condition of the company.
f. Discuss other factors beyond the ratios that need to be considered in the assessment of the company's health.
g. Discuss how your assessment compares to what management is telling the shareholders in the annual report.
h. Identify possible problems you see this company facing in the next year that would require further analysis and exploration.

We have selected Target Corporation
Target Corporation was founded in Minnesota in 1902. It is the sixth largest retailer in the United States and is ranked 27th on the 2005 Fortune 500. Target is performing very well in the market place though its stock's performance is subdued. The company operates over 1,450 stores in 47 states in USA.
(Wikipedia)
a. Obtain financial information for a Fortune 500 company. You should begin by obtaining the annual reports for the company (include them with your report). .
b. Prepare a 3 year trend table of the financial ratios presented in Table 1 for your selected company. Include a brief rationale for each ratio you have calculated.
c. Compare the ratios calculated against industry averages.

All these are in the attached excel file
d. For each ratio calculated, write a paragraph interpreting the trends and identify strengths and weaknesses.
Profitability
Profitability ratios try to measure how profitable the firm is. Note that their success in this endeavor depends on how accurately the financial statements reflect reality. They include the profit margin on sales, basic earning power, return on total assets (ROA) and return on common equity (ROE).
Profit Margin on Sales = Net Income available to Common Shareholders / Sales
Gross Margin on Sales = Gross Operating margin / Sales

? Return on Assets = Net Income available to Common Shareholders / Total Assets
? Return on Equity = Net Income available to Common Shareholders / Common Equity
The profitability ratios, indicates a company's financial health and how effectively the firm is being managed to earn a satisfactory profit and return on investment. Target's net profitability has increased to 4.68% in 2007 from 4.3% in 2004 but its less than 2005 levels. The gross profit margins have been consistent around 33% and this year its highest at ...

Solution Summary

Complete and submit a 1,400-2,100-word Financial Ratio Analysis Report following the guidelines below...

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Use an Excel spreadsheet to perform financial analysis on Target's most recent annual report to include liquidity, profitability ratios, asset management, debt management, and market returns. (See list of ratios below to be completed.) Use the formulas and cell links to show your work. Based on your analysis, write a 700-1,050-word report identifying the key strengths and weaknesses of the company's financial position. Include in your report recommendations on what should be included in the company's future plans in order to improve their financial performance.
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(See attached files for full problem description)

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