Analysis and Interpretation of Profitability Balance sheets and income statement

Question

Analysis and Interpretation of Profitability Balance sheets and income statements for Target Corporation follow Income Statement For Fiscal Years Ended ($ millions) 2008 2007 2006 Sales Credit card revenues Total revenues Cost of sales Selling, general and administrative expenses Credit card expenses Depreciation and amortization Earnings before interest and income taxes Net interest expense Earnings before income taxes Provisions for income taxes Net earnings 61,471$57,878 $51,271 1,8961,612 1,349 63,367 59,490 52,620 41,895 39,399 34,927 11,185 776 1,6591,496 1,409 5,272 5,069 4,323 463 4,625 4,4973,860 1,7761,710 1,452 $2,849 2,787 $2,408 13,704 12,819 837 707 647 572

Explanation / Answer

a)2008 NOPAT

NOPAT=EBIT(1-tax rate)

=5272(1-39%)

=3216

b)2008 NOA

NOA=Current assests-Current laibilities+Non current assests-Non current laibilities

2008 NOA =6808

2007 NOA=3454

C)2008 RNOA, 2008 NOAT

2008 RNOA=EBIT(1-Tax)/NOA

=3216/6808

=47.23%

2008 NOAT=Total revenue/NOA

=63367/6808

=9.30%

d)2008 NNO, 2007 NNO

2008 NNO=14640

2007 NNO=9224

e)2008 ROE

2008 ROE=EAT/Equity

=2849/15307

=0.187

f)2008 nonoperating return

2008 nonoperating return=96.17%

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