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The Target Corporation: Annual Report Analysis
The Target Corporation is a general merchandise retailer in the United States comprised of three operating entities: Target, Mervyns and Marshall Fields. Target is an upscale discount chain. At the end of fiscal 2002 there were 1,147 Target stores in 48 states. ... Target’s 2002 Annual Report outlines the company’s financial condition and vision for growth. The annual report is a useful tool for potential investors to gain a deeper understanding of the company’s financial condition. Financial statements, footnotes, depreciation and inventory should be analyzed to have a better understanding of The Target Corporation’s financial position (“IBM”).
Purpose of the Accountant’s Report
The purpose of the accountant’s report is to notify investors, customers and all other readers that the report is reliable. In the accountant’s report a summary of the financial statement results are included to show that the company’s financial status is accurate. The accountant’s report also discusses whether or not the audits are complete, reasonable and conducted under the generally accepted accounting principles. ... The Target Corporation example shows earnings and earnings per share. Target refers to their income statement as “Consolidated Results of Operation. ... The report has sections for revenue, expenses, net income/loss, and profit or loss. ... The Target Corporation’s Annual Report adds sales and credit card revenues to calculate total revenue of $42,722 million. The income statement shows Target has experienced two years of increasing revenue. Target’s total revenue in 2002 increased 10% over total revenues in 2001. The majority of Target’s total revenue was generated by sales. ... Target’s greatest expense is “Cost of Goods,” accounting for 70% of their total expenses. ...
Instead of calculating a net income or a net loss on their income statement, Target’s statement shows net earnings, net earnings per share, and diluted earnings per share. This change in format is because the entity is a corporation instead of a proprietorship or partnership.
The Target Corporation has seen increased earnings per share steadily over the last two years. ... Target’s official press release that announced the fiscal 2002 earnings to Wall Street and the press quoted Bob Ulrich, Chairman and CEO, regarding future earnings per share growth:
“We are pleased with our overall financial results for fiscal 2002, especially in light of your relatively soft sales performance. ... We remain confident that we will continue to generate average annual earnings per share growth of fifteen percent or more over time” (1). ... The Target Corporation refers to the Balance Sheet as their “Consolidated Statements of Financial Position.” Target’s Balance Sheet shows the stockholder or shareholder exactly how much the company owns in cash, inventory, land, and buildings. Target’s Balance Sheet is in the report format, separating current assets from long-term assets. The Target Corporation owns almost $11,935 million in current assets. ... The majority of Target’s long-term assets come from buildings and improvements to current buildings ($1,527 million). Buildings and Improvements represent 70% of Target’s total $16,668 million in long-term assets. Target’s total assets on February 1st, 2003 were $28,603 million, an 18% increase over 2001.
Target’s second half of their Balance Sheet outlines liabilities and shareholder’s investments. In Target’s 2002 fiscal year, there was $7,523 million in current liabilities. ... Long-term debt represented $10,186 million of Target’s liabilities. ...
Consolidated Statement of Cash Flows
The purpose of the Statement of Cash Flows is to report the cash receipts and cash payments.
Approximate Word count = 2897
Approximate Pages = 11.6
(250 words per page double spaced)
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