Financial statements of Target are available at httpwwwannua

Financial statements of Target are available at: http://www.annualreports.com/Company/target-corp

Financial Analysis: For this part of the assessment, you will prepare spreadsheets and analysis to be included in your financial analysis paper.

A. Prepare an Excel spreadsheet to compare financial ratios for Target Corporation to the industry averages.

B. Compose a summation as to how Target Corporation is performing in relation to its competitors. Be sure to base your answer on the spreadsheet you previously prepared.

List of competitors: Walmart, costco, amazon

When answering the questions, consider the following:

The financial ratios that are compared to competitors should be presented in Excel. You will want to calculate these ratios. In the summation that should be located in your paper you will want to present your findings and provide insight into how Target Corporation is performing in comparison. Make sure you refer to the Excel Spreadsheet in your summation.

Solution

A. Prepare an Excel spreadsheet to compare financial ratios for your company to the industry averages.

Target

Industry Averages

Return on Equity

17.50%

16.90%

Price/earnings

263.25

21.7

Market Cap

842.8B

891B

Price / Book

65.05

4.6

Net Profit Margin

6.59%

2.60%

Debt to Equity

1.95

63.3

As noted in the chart above Target has a higher ROE than the industry average. This is encouraging for the stock holders as it shows that company has good profitability and their investment was a good thing. The P/E ratio is quite a bit higher than the average. That means that investors may think twice before placing money in the company due to those numbers. For example every $263.25 placed with the company will yield them $1 in earnings. That high number can mean one of two things for the company. 1). Higher earnings are expected to come in the near future. 2). The low industry average could be because the other companies are way undervalued. Either way, I would recommend Target look into why that number is so far off from the industry average.

Market Capitalization is below the industry average. This could be because the number of investors is very high or because the stock price is lower than the industry averages. The P/B ratio is higher than the industry average. Since this ratio compares the stock’s market value to the book value the higher number is most likely a good thing. The net to profit margin is higher than the industry average and that show that the company is making a larger profit than some of its competitors. The debt to equity ratio is far below the industry average. This shows that Target has done a great job of not using a lot of debt to finance its assets. This also shows that it is not a risky investment for people to get stock from the company