Financial Report Target Corporation

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Introduction

Target Corporation is currently located only in the Target Corporation is currently located only in the United States. There are 3 States (Alaska, Hawaii, and Vermont) that are currently void of Target stores (USSEC, 2011). They may benefit by expanding in these states as well as globally. As compared to its competitor, it has little or no international presence in the markets.

Unfortunately for Target, they have been the victim of numerous lawsuits in recent years. It has lost its focus from its markets and business goals in resolving lawsuits against the company. Its emphasis upon the quality of products makes its products expensive than its competitor Wal-Mart.

Trend and Comparative Analysis

Net Profit and Revenues

            The net profit of the Target Corporation is more than the industry average and the also the main competitor of the target corporation Best Buy but in the as we go on to the year 2010 to the year 2012, the net profit of the Best Buy is increasing and it over taking the target corpations in terms of the revenues and the net profit.

Liquidity

The liquidity position of the Target incorporation is better than the industry average. This means the Target incorporation has more in pocket for the payment of the one dollar of the liabilities than the competitors of the Target incorporation have on average. The current ratio of the company is 1.65 which slightly higher than the industry average which 1.63. The quick ratio of the company is also more than the industrial average. So from this analysis we can say that the liquidity position of the Target incorporation is better that the average liquidity position of the competitors the Target incorporation.

 

Profitability

The profitability of the Target incorporation is also good and it has increasing trend in the last five years. The company has 30.9 percent gross profit margin which is good but less than the  industry average the reason for this is that some of the big players in the industry of the The Target incorporation has the biggest share in the market and they have well above the par profitability which make the industry average higher than it should be. But the The Target incorporation has better profitability than many of its competitors.

 

Asset Utilization

The asset utilization of the Target incorporation is also reasonable as we look into the asset turnover ratio, inventory turnover ratio, and the fixed asset turnover ratio of the Target incorporation. But if we compare these ratios of the Target incorporation with the industry averages this looks lower than the industry average again this is because of the share of the big players in the industry. The fixed asset turnover ratio of the Target incorporation is 2.1 which is good but still below the industry average.

 

Leverage

The leverage that the Target incorporation management is applying in the business is positive as the financial leverage of the Target incorporation is 19.28 percent which is higher than the industry average.

 

ROI DuPont Analysis

 

Risk Analysis

Target has a wide presence in the U.S. market with over 1,700 stores in 50 states and District of Columbia. Due to its huge size, the retailer runs the risk of cannibalizing its own sales in the U.S. In 2010, Target’s comparable store sales increased by just 2.1% compared to a decrease of 2.5% and 2.9% in 2009 and 2008, respectively. [1] Even though the retailer returned to positive comparable store sales growth in 2010, the figure was low given compared to recession-hit 2009. The retailer attributes cannibalization as one of the important reasons for the slow growth in comparable store sales. Although the figure increased slightly to 3% in fiscal 2011, self-cannibalization still is an issue. 

Beta Analysis

The Beta is an evaluation of the individual stock risk comparative to the overall precariousness of the stock market is considered based on very resonance finance theory which is the Capital Assets Pricing Model (CAPM).

Target= Covariance/Variance= 0.61

Recommendations

This study provided brief overview on the external environment analysis of The Target incorporation. The findings of the study suggested the The Target incorporation should focus on the following factors in order to excel its business and social image in the world Expansion of business operations to the other parts of the world. The The Target incorporation is currently conducts its business practices in US only. They should expand their business perspective and have a broader sense of a doing things. For this it should consider developing markets of Asia like India, China and Japan etc. these markets show great potential of expansion and profitability.

The Target incorporation is obsessed with the quality thing. Quality concern is a good thing but obsession is not. Target’s obsession of quality makes its products expensive as compared to that of its competitor. Therefore it must devise effective strategies to ensure high quality at economic prices.

References:

  1. Bruce, Charley (July 9, 2013). Target fined $120,000 for ‘Spooky String,    bizjournals.com. Retrieved on June 22, 2011 from     http://www.bizjournals.com/twincities/stories/2007/07/09/daily20.htm
  2. http://www.stock-analysis-on.net/NYSE/Company/Target-Corp#Financial-Statements
  3. https://corporate.target.com/_media/TargetCorp/annualreports/content/download/pdf/Annual-Report.pdf?ext=.pdf
  4. http://voices.yahoo.com/swot-analysis-target-company-3841468.html?cat=3
  5.  http://finance.yahoo.com/q/pr?s=TGT+Profile
  6. http://investing.businessweek.com/research/stocks/financials/ratios.asp?ticker=TGT

Scatterplot

Problem 1:

 

Descriptive Statistics
N Mean Std. Deviation
age 713 37.69 12.114
Valid N (listwise) 713

 

Boxplot:

 

 

Describe how the boxplot and histogram for age compares to the distribution you would expect with a normal distribution.

 

 

Case Processing Summary
Cases
Valid Missing Total
N Percent N Percent N Percent
age 713 100.0% 0 0.0% 713 100.0%

 

 

From box plot we observe that  median for the given data  lies between 30 to  40 years. Also we observe that the given distribution is said to be positively skewed. Since most of the persons age are greater than mean and median value. So we can’t consider the given distribution is not a normal distribution.

 

Form histogram we observer that the given distribution is said to be positively skewed. Since almost all rectangles are in right side when compared with left side. In this case the relation between mean, median and mode can be considered as mean>median>mode. So the given distribution can’t be considered as Normal distribution. If a distribution is said to be Normal mean=median=mode.

Problem 2:

 

Describe how the scatterplot reflects the level of measurement and distribution for agegrp, as it relates to the BMI.

How is the way age is represented in problem 2 different from how it is represented in problem 1? Why would you choose to use agegrp instead of age?

Scatterplot Problems

 

From scatter diagram we observe that for age group 6 we have poor relation for age and BMI. For age groups  2,3,4,5 we have positively relation between age and bmi. For age group1 we have moderately relation between age and bmi.

 

 

objective function

s.t.

 

Since the objective function involves non-linear combination of variables and the variables are allowed to take non-integer values, the model is a NLP

 

Data and Variable

s.t.

IVRs, Constraints and Objective

s.t.

 

Product in inventory

For the problem with backlogging, the product in inventory will have the pattern as shown

 

 

 

 

 

 

 

 

 

For each cycle,

Cost incurred by the retailer during a single cycle

Daily cost

Put in D = 20, f = 80, h = 10,  = 20

s.t.

 

Data and Variable

s.t.

 

IVRs, Constraints and Objective

s.t.

 

When the cost of backlogging is very large, it is expected that backlogging will no longer be cost effective such that B will tends to zero. i.e. the optimal solution in this case will tend to be the optimal solution of EOQ without backlogging.

 

 

 

Is very large, B will become very small

 

 

3(1).

Let D be the demand of the newspaper

3(2)

 

 

3(3a)

When l is decreased by a small , that means the lower limit of the demand is smaller and thus the overall distribution of the demand tends to have a concentration shift to the left (decrease). Therefore it is expected that  will decrease.

3(3b)

When u is decreased by a small  and l is increased by the same small , that means the overall distribution of the demand is more concentrated to the center without shifting. Therefore the effect on  will depend on the value of p, c and r.

3(3c)

If all p, c and r increased by the same amount, it is expected that both the revenue and cost will increase by the same amount and thus no change in profit as well as the optimal quantity  since there are no change in the distribution of the demand

3(3d)

If p and c are identical, then the profit will be zero when  and will be non-positive when Q > D. Thus it will not be rational to have Q > D and thus  should be as small as possible, which will equals to l

3(3e)

If l and u are identical, then the demand will no longer be random variable but fixed value of u,

Because when

When

 

3(4)

Let a be the percentage of time spent on newspaper work

Put in p = 2.5, c = 1.5, r = 0.5, l=100a, u=200a,

s.t.

 

Data and Variable

s.t.

 

IVRs, Constraints and Objective

s.t.

 

Since the objective function is a linear function of a,

if t < 125, it will be an increasing function of a and thus a = 1 will be the optimal solution of maximizing income, i.e. all the time will be put on newspaper work

if t > 125, it will be a decreasing function of a and thus a = 0 will be the optimal solution of maximizing income, i.e. all the time will be put on telemarketing work

Therefore in order to split time between two job, t = 125