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Financial analysis on Target's most recent annual report

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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)

I am needing help performing a financial analysis and my textbook is very vague. The instructions, ratios, and specifics are attached.

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INSTRUCTIONS:

Financial Analysis Paper

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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RATIOS TO COMPLETE:

Liquidity Ratios
Current ratio
Quick ratio

Asset Management Ratios
Receivables turnover
Days' sales outstanding
Inventory turnover
Days' cost in inventory
Payables turnover
Days' payables outstanding
Cash conversion cycle
Net fixed asset turnover
Total asset turnover

Debt Management Ratios
Debt to Equity
Debt to Assets
Debt to Capital
Times interest earned

Profitability Ratios
Gross profit margin
Operating profit margin
Net profit margin
Return on total assets
Return on common equity
Return on invested capital

OVERVIEW OF THE COMPANY

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. It sells more gift cards than any other retailer in the United States and is also the third-largest seller of music in the United States.
(WIKIPEDIA)
Target subcategories include SuperTarget and Target Greatland, account for approximately 80 percent of Target Corporation's revenue. For the nine ...

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Financial Analysis for Target

Your parents have been left a substantial amount of money and want to invest in a company. Your father trusts you to make a recommendation, but also wants to see the reasoning behind your choice.

You have an idea of which company to choose and you decide to prepare three sets of documents for your parents to consider: business analysis, combined income and cash flow statement, and trend analysis.

Business analysis

Select a public company that trades on either the NYSE or the NASDAQ. Perform a business analysis (both external and internal) for your company using various sources of information. Possible sources include the following:
- Annual report and/or Form 10-K
- Magazine or newspaper articles
- Company website
- Government information
- Industry information
- Value Line, Standard & Poor's, Moody's, etc.
- Analyst reports
- Internet articles

Combined income and cash flow statement

Download the company's annual report from its website, or the company's Form 10-K from the U.S. Securities and Exchange Commission (SEC) website [www.sec.gov].

- Confirm that the firm's income, dividends, and other capital transactions explain the change in equity for the most recent year. (You may need to consult the statement of shareholders' equity.)
- Confirm that the firm's cash flow statement begins with the same net income amounts found in the income statement.
- Confirm that the firm's cash flow statement shows a change in cash that is equal to the difference between cash shown on the balance sheet at the beginning and end of the year. In Excel, construct a combined income statement and cash flow statement.
- Write a piece that answers the following: what would you do if you found there was a huge difference in the net income amounts and the reported cash flow amounts? How could technology limit the likelihood of this happening again?

Trend analysis

Finally, prepare a trend analysis of operating ratios for at least three years' worth of financial data. Prepare the analysis in Excel. You may wish to create a common-sized income statement first, but it isn't required.
If you adjusted for any nonrecurring items in step (1), explain the adjustments in a separate Word document. Use any other information in your company's annual report to explain the change in revenues, gross margin percentage, and operating margin percentage. Add this information to the Word document.

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