- April 19, 2012
- Posted by: essay
- Category: Sample essay papers
1. The Target’s history
Target is one of the largest retailers in the USA. The company is ranked fifth among the largest retailers operating in the USA (Russo and Shoemaker, 2002). In actuality, the position of the company is stable, though it cannot fail to be affected by the profound economic recession. Nevertheless, its corporate culture and fundamental principles, which define the work of all people employed within Target, remain unchangeable. In this respect, it is important to underline that the company is very concerned with its corporate culture and traditions and Target attempts to extend its norms and standards on all units and subsidiaries which comprise the national network of the company. The company’s revenue constitute $63,367 billion, its operating income is $4,652 billion, while its net income is $2,849 billion and its total assets are $44,560 billion.
Obviously, the current position of Target in the national market of the USA is unachievable for many minor companies which are unable to compete with Target. At the same time, the company faces a problem of a growing competition from the part of other leaders of American retail industry, such as Wal-Mart, Costco and others (Russo and Shoemaker, 2002). In such a situation, the company needs to maintain its competitive position in the market. In this regard, the market expansion can be viewed as a key factor that defines the competitive power of Target in the contemporary business environment.
At this point, it is possible to dwell upon the structure of the company which is quite effective and aims at the flexibility of the company at large and its units and subsidiaries in particular. In this respect, it should be said that Target represents a network of stores operating nationwide. It is worth mentioning the fact that, unlike many other leading retailers, Target has not launched an international market expansion. Instead, the company focused solely on the national market of the USA, where it attempts to strengthen its position constantly. The autonomy of the company’s units allows Target to become more flexible and response to the new challenges of the business environment fast and adequately. For instance, Target Financial Services is mainly responsible for financial issues, including issuing Target’s credit cards; Target Sourcing Services is a global sourcing organization that locates merchandise from around the world for Target and helps import merchandise to the USA (Klein, 1999).
2. Financial Annual Report
On analyzing the financial position of the company, it should be said that the company has demonstrated a trend to the steady growth since its revenues has been growing within the last three years along with its income and profit (See Table 1).
Table 1.
Annual Income Statements
| Period End Date |
02/02/2008 |
02/03/2007 |
01/28/2006 |
01/29/2005 |
01/31/2004 |
||||||||||||
| Period Length |
52 Weeks |
53 Weeks |
52 Weeks |
52 Weeks |
52 Weeks |
||||||||||||
| Stmt Source |
10-K |
10-K |
10-K |
10-K |
10-K |
||||||||||||
| Stmt Source Date |
03/13/2008 |
03/15/2007 |
04/10/2006 |
04/11/2005 |
04/11/2005 |
||||||||||||
| Stmt Update Type |
Updated |
Updated |
Updated |
Updated |
Restated |
||||||||||||
|
Revenue |
63,367.0 |
59,490.0 |
52,620.0 |
46,839.0 |
42,025.0 |
||||||||||||
|
Total Revenue |
63,367.0 |
59,490.0 |
52,620.0 |
46,839.0 |
42,025.0 |
||||||||||||
|
Cost of Revenue, Total |
42,732.0 |
40,106.0 |
35,703.0 |
32,182.0 |
29,111.0 |
||||||||||||
|
Gross Profit |
20,635.0 |
19,384.0 |
16,917.0 |
14,657.0 |
12,914.0 |
||||||||||||
|
Selling/General/Administrative Expenses, Total |
13,704.0 |
12,819.0 |
11,185.0 |
9,797.0 |
8,657.0 |
||||||||||||
|
Research & Development |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||||||||||
|
Depreciation/Amortization |
1,659.0 |
1,496.0 |
1,409.0 |
1,259.0 |
1,098.0 |
||||||||||||
|
Interest Expense (Income), Net Operating |
647.0 |
575.0 |
463.0 |
570.0 |
556.0 |
||||||||||||
|
Unusual Expense (Income) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||||||||||
|
Other Operating Expenses, Total |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||||||||||
|
Operating Income |
4,625.0 |
4,494.0 |
3,860.0 |
3,031.0 |
2,603.0 |
||||||||||||
|
Interest Income (Expense), Net Non-Operating |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||||||||||
|
Gain (Loss) on Sale of Assets |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||||||||||
|
Other, Net |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||||||||||
|
Income Before Tax |
4,625.0 |
4,494.0 |
3,860.0 |
3,031.0 |
2,603.0 |
||||||||||||
|
Income Tax – Total |
1,776.0 |
1,710.0 |
1,452.0 |
1,146.0 |
984.0 |
||||||||||||
|
Income After Tax |
2,849.0 |
2,784.0 |
2,408.0 |
1,885.0 |
1,619.0 |
||||||||||||
|
Minority Interest |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||||||||||
|
Equity In Affiliates |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||||||||||
|
U.S. GAAP Adjustment |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||||||||||
|
Net Income Before Extra. Items |
2,849.0 |
2,784.0 |
2,408.0 |
1,885.0 |
1,619.0 |
||||||||||||
|
Total Extraordinary Items |
0.0 |
0.0 |
0.0 |
1,313.0 |
190.0 |
||||||||||||
|
|||||||||||||||||
|
Net Income |
2,849.0 |
2,784.0 |
2,408.0 |
3,198.0 |
1,809.0 |
||||||||||||
|
Total Adjustments to Net Income |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||||||||||
|
|||||||||||||||||
|
Basic Weighted Average Shares |
845.4 |
861.9 |
882.0 |
903.8 |
911.0 |
||||||||||||
|
Basic EPS Excluding Extraordinary Items |
3.37 |
3.23 |
2.73 |
2.09 |
1.78 |
||||||||||||
|
Basic EPS Including Extraordinary Items |
3.37 |
3.23 |
2.73 |
3.54 |
1.99 |
||||||||||||
|
Diluted Weighted Average Shares |
850.8 |
868.6 |
889.2 |
912.1 |
919.2 |
||||||||||||
|
Diluted EPS Excluding Extrordinary Items |
3.34 |
3.21 |
2.71 |
2.07 |
1.76 |
||||||||||||
|
Diluted EPS Including Extraordinary Items |
3.34 |
3.21 |
2.71 |
3.51 |
1.97 |
||||||||||||
|
Dividends per Share – Common Stock Primary Issue |
0.54 |
0.46 |
0.38 |
0.31 |
0.27 |
||||||||||||
|
Gross Dividends – Common Stock |
454.0 |
396.0 |
334.0 |
280.0 |
246.0 |
||||||||||||
|
Interest Expense, Supplemental |
669.0 |
597.0 |
490.0 |
589.0 |
556.0 |
||||||||||||
|
Depreciation, Supplemental |
1,644.0 |
1,509.0 |
1,384.0 |
1,232.0 |
1,068.0 |
||||||||||||
|
Normalized EBITDA |
6,931.0 |
6,565.0 |
5,732.0 |
4,860.0 |
4,257.0 |
||||||||||||
|
Normalized EBIT |
5,272.0 |
5,069.0 |
4,323.0 |
3,601.0 |
3,159.0 |
||||||||||||
|
Normalized Income Before Tax |
4,625.0 |
4,494.0 |
3,860.0 |
3,031.0 |
2,603.0 |
||||||||||||
|
Normalized Income After Taxes |
2,849.0 |
2,784.0 |
2,408.0 |
1,885.0 |
1,619.0 |
||||||||||||
|
Normalized Income Available to Common |
2,849.0 |
2,784.0 |
2,408.0 |
1,885.0 |
1,619.0 |
||||||||||||
|
Basic Normalized EPS |
3.37 |
3.23 |
2.73 |
2.09 |
1.78 |
||||||||||||
|
Diluted Normalized EPS |
3.34 |
3.21 |
2.71 |
2.07 |
1.76 |
||||||||||||
|
Amortization of Intangibles |
15.0 |
-13.0 |
25.0 |
27.0 |
30.0 |
||||||||||||
Source: Target Corp. Financial Statement. (2008)
3. Economic situation of Target
Target’s financial performance also tends to the improvement since it stock prices grow, while the growth of the company’s assets is proportional to the growth of its liabilities that indicates to the stable financial development of Target (See Table 2)
Table 2
Balance Sheet
|
2008 |
2007 |
2006 |
2005 |
2004 |
|||||||||||||||||||||||||||||||
| Period End Date |
02/02/2008 |
02/03/2007 |
01/28/2006 |
01/29/2005 |
01/31/2004 |
||||||||||||||||||||||||||||||
| Stmt Source |
10-K |
10-K |
10-K |
10-K |
10-K |
||||||||||||||||||||||||||||||
| Stmt Source Date |
03/13/2008 |
03/15/2007 |
04/10/2006 |
04/11/2005 |
04/11/2005 |
||||||||||||||||||||||||||||||
| Stmt Update Type |
Updated |
Updated |
Updated |
Updated |
Restated |
||||||||||||||||||||||||||||||
|
Assets |
|||||||||||||||||||||||||||||||||||
|
Cash and Short Term Investments |
2,450.0 |
813.0 |
1,648.0 |
2,245.0 |
708.0 |
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||
|
Total Receivables, Net |
8,651.0 |
6,757.0 |
6,226.0 |
5,497.0 |
5,012.0 |
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||
|
Total Inventory |
6,780.0 |
6,254.0 |
5,838.0 |
5,384.0 |
4,531.0 |
||||||||||||||||||||||||||||||
|
Prepaid Expenses |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||||||||||||||||||||||||||||
|
Other Current Assets, Total |
1,025.0 |
882.0 |
693.0 |
796.0 |
2,701.0 |
||||||||||||||||||||||||||||||
|
Total Current Assets |
18,906.0 |
14,706.0 |
14,405.0 |
13,922.0 |
12,952.0 |
||||||||||||||||||||||||||||||
|
Property/Plant/Equipment, Total – Net |
24,095.0 |
21,431.0 |
19,038.0 |
16,860.0 |
15,153.0 |
||||||||||||||||||||||||||||||
|
Goodwill, Net |
60.0 |
60.0 |
60.0 |
206.0 |
229.0 |
||||||||||||||||||||||||||||||
|
Intangibles, Net |
148.0 |
152.0 |
123.0 |
0.0 |
0.0 |
||||||||||||||||||||||||||||||
|
Long Term Investments |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||||||||||||||||||||||||||||
|
Note Receivable – Long Term |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||||||||||||||||||||||||||||
|
Other Long Term Assets, Total |
1,351.0 |
1,000.0 |
1,369.0 |
1,305.0 |
3,082.0 |
||||||||||||||||||||||||||||||
|
Other Assets, Total |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||||||||||||||||||||||||||||
|
Total Assets |
44,560.0 |
37,349.0 |
34,995.0 |
32,293.0 |
31,416.0 |
||||||||||||||||||||||||||||||
|
Liabilities and Shareholders’ Equity |
|||||||||||||||||||||||||||||||||||
|
Accounts Payable |
6,721.0 |
6,575.0 |
6,268.0 |
5,779.0 |
4,956.0 |
||||||||||||||||||||||||||||||
|
Payable/Accrued |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||||||||||||||||||||||||||||
|
Accrued Expenses |
2,118.0 |
2,004.0 |
2,193.0 |
1,633.0 |
1,288.0 |
||||||||||||||||||||||||||||||
|
Notes Payable/Short Term Debt |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||||||||||||||||||||||||||||
|
Current Port. of LT Debt/Capital Leases |
1,964.0 |
1,362.0 |
753.0 |
504.0 |
863.0 |
||||||||||||||||||||||||||||||
|
Other Current Liabilities, Total |
979.0 |
1,176.0 |
374.0 |
304.0 |
1,207.0 |
||||||||||||||||||||||||||||||
|
Total Current Liabilities |
11,782.0 |
11,117.0 |
9,588.0 |
8,220.0 |
8,314.0 |
||||||||||||||||||||||||||||||
|
Total Long Term Debt |
15,126.0 |
8,675.0 |
9,119.0 |
9,034.0 |
10,155.0 |
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||
|
Deferred Income Tax |
470.0 |
577.0 |
851.0 |
973.0 |
632.0 |
||||||||||||||||||||||||||||||
|
Minority Interest |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||||||||||||||||||||||||||||
|
Other Liabilities, Total |
1,875.0 |
1,347.0 |
1,232.0 |
1,037.0 |
1,183.0 |
||||||||||||||||||||||||||||||
|
Total Liabilities |
29,253.0 |
21,716.0 |
20,790.0 |
19,264.0 |
20,284.0 |
||||||||||||||||||||||||||||||
|
Redeemable Preferred Stock |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||||||||||||||||||||||||||||
|
Preferred Stock – Non Redeemable, Net |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||||||||||||||||||||||||||||
|
Common Stock |
68.0 |
72.0 |
73.0 |
74.0 |
76.0 |
||||||||||||||||||||||||||||||
|
Additional Paid-In Capital |
2,656.0 |
2,387.0 |
2,121.0 |
1,810.0 |
1,530.0 |
||||||||||||||||||||||||||||||
|
Retained Earnings (Accumulated Deficit) |
12,761.0 |
13,417.0 |
12,013.0 |
11,148.0 |
9,523.0 |
||||||||||||||||||||||||||||||
|
Other Equity, Total |
-178.0 |
-243.0 |
-2.0 |
-3.0 |
3.0 |
||||||||||||||||||||||||||||||
|
Total Equity |
15,307.0 |
15,633.0 |
14,205.0 |
13,029.0 |
11,132.0 |
||||||||||||||||||||||||||||||
|
Total Liabilities & Shareholders’ Equity |
44,560.0 |
37,349.0 |
34,995.0 |
32,293.0 |
31,416.0 |
||||||||||||||||||||||||||||||
|
Total Common Shares Outstanding |
818.74 |
859.77 |
874.07 |
890.64 |
911.81 |
||||||||||||||||||||||||||||||
|
Total Preferred Shares Outstanding |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||||||||||||||||||||||||||||
Source: Target Corp. Financial Statement. (2008)
4. Anticipation
Thus, Target still remains one of the leading retailers in the US, with a stable financial position and good prospects.
Taking into consideration the stability of financial performance of the company, it is possible to presuppose that Target will be able to maintain a positive marketing performance. On the other hand, the current economic recession and decrease of the buying power can represent a serious threat to the position of Target and can undermine its financial stability and, therefore, deteriorate its marketing performance