If somebody could help me with steps to the following homework problem. I need h
ID: 2579185 • Letter: I
Question
If somebody could help me with steps to the following homework problem.
I need help with a Financial Statement Analysis of Target 2015.
Compute the following ratios based on Target’s financial statements.
Acid-test ratio
Current ratio
Inventory Turnover
Total Debt to Total Asset ratio
Net profit margin
Gross profit
Prepare a vertical Analysis of the Income Statement and Balance Sheet
Provide your analysis of how well or badly Target is doing based on your research.
You can use the link below to find Target's 2015 annual report:
https://corporate.target.com/_media/TargetCorp/annualreports/2015/pdfs/Target-2015-Annual-Report.pdf
Thanks
Explanation / Answer
Acid Test Ratio
= Quick Assets
= (14130 - 8601)
Current Liabilities
12622
0.44
Current Ratio
= Current Assets
= 14130
Current Liabilities
12622
1.12
Inventory Turnover
= Inventory
= 8601
Sales
73785
11.66%
Total Debt to Total Assets Ratio
= Debt
= 14683
Total Assets
40262
0.36
Net Profit Margin
= Net Profit
= 3363
Sales
73785
4.56%
Gross Profit Margin
= Gross Profit
= 21788
Sales
73785
29.53%
Vertical Analysis of Income Statement
2015
Sales
$ 73,785
100%
Cost of Sales
$ 51,997
70.47%
Gross Margin
$ 21,788
29.53%
Selling, general and administrative expenses
$ 14,665
19.88%
Depreciation
$ 2,213
3.00%
Gain on Sale
$ (620)
-0.84%
Earnings before Interest and Tax
$ 5,530
7.49%
Net Interest Expense
$ 607
0.82%
Earnings before Tax
$ 4,923
6.67%
Provision for Income Tax
$ 1,602
2.17%
Net Earnings from Continued Business
$ 3,321
4.50%
Discontinued Operations
$ 42
0.06%
Net Earnings
$ 3,363
4.56%
Vertical Analysis of Balance Sheet
Assets
Cash and Cash equivalents
$ 4,046
10.05%
Inventory
$ 8,601
21.36%
Assets of discontinued operations
$ 322
0.80%
Other Current Assets
$ 1,161
2.88%
Total Current Assets
$ 14,130
35.10%
Fixed Assets Net of depreciation
$ 25,217
62.63%
Noncurrent assets of discontinued operations
$ 75
0.19%
Other non current assets
$ 840
2.09%
Total Assets
$ 40,262
100.00%
Liabilities and Shareholders' investment
Accounts Payable
$ 7,418
18.42%
Accrued and Other Current Liabilities
$ 4,236
10.52%
Current Portion of long term debt and other borrowings
$ 815
2.02%
Liabilities of Discontinued business
$ 153
0.38%
Total Current Liabilities
$ 12,622
31.35%
Long term debt and borrowings
$ 11,945
29.67%
Deferred income tax
$ 823
2.04%
NonCurrent Portion of long term debt and other borrowings
$ 18
0.04%
Other non current liabilities
$ 1,897
4.71%
Total NonCurrent Liabilities
$ 14,683
36.47%
Shareholders' investment
Common Stock
$ 50
0.12%
Additional Paid in Capital
$ 5,348
13.28%
Retained Earnings
$ 7,559
18.77%
Total Shareholders' investment
$ 12,957
32.18%
Total Liabilities and Shareholders' investment
$ 40,262
100.00%
Acid Test Ratio
= Quick Assets
= (14130 - 8601)
Current Liabilities
12622
0.44
Current Ratio
= Current Assets
= 14130
Current Liabilities
12622
1.12
Inventory Turnover
= Inventory
= 8601
Sales
73785
11.66%
Total Debt to Total Assets Ratio
= Debt
= 14683
Total Assets
40262
0.36
Net Profit Margin
= Net Profit
= 3363
Sales
73785
4.56%
Gross Profit Margin
= Gross Profit
= 21788
Sales
73785
29.53%
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