Target Corporation Executive Summary

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Target Corporation Company & Industry Background Information Target Corporation is a discount retailer, started by George D. Dayton, and based out of Minneapolis, MN. This chain store was started as Goodfellows in 1902. In 1962, the first Target was opened in Roseville, MN. Currently, the CEO is Bob Ulrich, but Target has announced that Gregg Steinhafel will be taking the reins in May 2009. Under Ulrich, the strategy has been to differentiate their brand by providing high-quality, fashionable merchandise at low prices. However, with the economy in financial mayhem, consumers are spending a lot less than in the past. Target, like many other retailers, may be faced with several significant issues in the near future. Target Corporation…show more content…
Net income was $2,849 million in 2008, which was an increase of 2.2% over 2007. Also, in 2008 Target posted receivables at $8,651 million, which was a 28.03% increase over 2007. The 28 percent jump in receivables can be an indicator of rising credit risk impending on the retailer. Target is aggressively offering the Target Visa card as well as the Target Check card. The increase in receivables could be due to an increase in accounts with higher credit limits. The issue arises with an increasing amount of consumers unable to pay off these high…show more content…
This is important to measure, where sales in stores open at least a year has declined for Target. Target Corporation’s current ratio and quick ratio have both increased in 2008 from 2007. The quick ratio measures the short-term liquidity of the company. The current ratio, which assesses current assets in proportion to current liabilities, has remained fairly consistent from 2006 to 2008. Although the current assets have increased, the currently liabilities have increased as well. Target it utilizing its assets wisely by continuing to make investments and take risks. The quick ratio provides a more rigorous test of the company’s solvency position, where inventories and prepaid expenses are removed from the calculation of current assets. The quick ratio was at 0.94 for 2008 and .68 for 2009. This shows Targets improvement over time to pay its current liabilities based on available cash, short term investments, and receivables. Some items that may have impacted the quick ratio were a major increase in cash & equivalents as well as a generous increase in receivables from 2007 to 2008. Target’s quick ratio was higher than Wal-Mart’s quick ratio. This is an important comparison as Target’s ratio was higher than Wal-Mart’s regardless of the fact that Wal-Mart is a larger company that has traditionally outperformed

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