A Report on a Major Retail Corporation - Assignment Example

Target retail chain report for the periods 2008 to [Insert [Insert and Unit [Insert [Insert Target retail chain report for the periods 2008 to 2011 Abstract Target is the third largest retailer in the USA with annual revenue from sales in the billions. Its net income as a percentage of sales is on an upward trend with a dip in 2009. Its earnings and dividends per share are on a consistent upward trend as is revenue and net income. It is also a liquid company with a current ratio of 1.71 and a quick ratio of 0.

96 in 2011. These figures are for the period under review from 2008 to 2011. Introduction Target is the third largest retail chain in the United States with sales of USD 67.4billion in 201, and 1767 stores in the US as of December 2010 (Forbes, 2012). Financial reports are important tools for investors to be able to gauge the potential returns possible by investing in a company. It also gives an indicator of the financial position of a company and its financial prospects in the near future. This paper discusses Target Stores Report especially focussing on its financial performance and gives a conclusion at the end.

Literature review Target is the third largest retail store in the United States by revenue with earnings per share increasing over the four year period (‘msn money’, 2012) as indicated below; The earnings per share (EPS) diluted and the dividends per share (DPS) issued against common stock have generally been on an upward trend from 2008 to 2011. Rising EPS and DPS shows shareholders have been getting value for their investment showing good financial performance. The EPS fell in 2009 compared to 2008 probably due to the difficult economic environment of 2009 The total revenue and gross profit have been impressive also increasing throughout the period under review (‘msn money’, 2012) as depicted below; Revenue has been on a steady upward trend for the period under review while the profits (gross profit) have also been on an upward trend.

Gross profit fell to USD 19 182 million in 2009 from USD 19 601 million in 2008 due to the harsh economic environment in 2009. The corporation has nonetheless shown appreciable growth and performance over the four year period with a just a dip in gross profit and net income in 2009 but revenue has been on a steady increase especially during the economic slowdown and recession experienced from 2009. The net income has also been on an equally upward trend in the period under review (except for 2009).

The percentage of net income as a percentage of sales has also been on an upward trend (‘msn money’, 2012) as shown below; This dipped in 2009 due to the global recession but has been on an otherwise upward trend. Target achieved such impressive results because of its wide variety of products, very competitive prices, discounts, and occasional price slices that makes it an irresistible shopping bargain. Most items one would be looking for are found under one roof giving consumer’s convenience.

Friendly customer service, effective advertising campaigns to remain visible to consumers and offering products at prices that are consistently low compared to its competitors have helped its performance a great deal. Its liquidity ratios as depicted below show that it can meet its short term debt obligations. Therefore it is a liquid corporation which is safe to invest in (Jan, 2012) Conclusion Target is a big corporation with sales in hundreds of billions reaching a high of USD 63. 4 billion in 2011 and a net income of USD 2.8 billion. Its ratios of net income to sales percentage are generally impressive and have been on an upward trend dipping in 2009 due to the severe economic downturn but rising sharply in 2010 and 2011.

Target is very liquid as shown by its liquidity ratios. The earnings per share and dividends per share as shown from Target’s figures show a consistently increasing returns for investors with a small dip in EPS in 2009. Investing in Target is therefore a prudent decision with a high likelihood of getting high returns especially now that the US economy is on the rebound. References Forbes. (2012, March 27). Target corporation. Retrieved from http://finapps.forbes.com/finapps/BuyHoldSellAnalysis.do?tkr=TGT Jan, B.

(2012, March 28). Balance sheet interpretation part ii: Liquidity ratios. Retrieved from http://www.gaebler.com/Balance-Sheet-Liquidity-Ratios.htm Msn money (2012) Retrieved from http://investing.money.msn.com/investments/stock-income-statement/?symbol=wmt