BAD-312 CASE STUDY PROJECT - PART B

Gwen Moore
July 26, 2014

Target Company: Target

I was interested in this company mainly because I was just curious about what type of financial information I
could find out in order to complete this project assignment. I also wanted to know how this companys financial
status is compared to Walmart. Honestly, I have not been very good with doing these types of financial
calculations so I am really not sure what type of financial data I will find and what my financial calculations
will really show.

Target Corp. (TGT)

-NYSE Follow
60.39 0.60(0.98%) Jul 25, 4:02PM EDT
After Hours: 60.24 0.15 (0.25%) Jul 25, 5:57PM EDT
60.99
Prev Close:
60.76
Open:
60.01 x 100
Bid:
62.00 x 500
Ask:
59.30
1y Target Est:
0.81
Beta:
Next Earnings Date: 20-Aug-14
Day's Range: 60.29 - 60.89
52wk Range: 54.66 - 72.07
2,629,205
Volume:
Avg Vol (3m): 5,480,590
Market Cap: 38.27B
20.40
P/E (ttm):
2.96
EPS (ttm):
Div & Yield: 2.08 (3.60%)

Business Summary
Target Corporation operates general merchandise stores in the United States and Canada. It offers household
essentials, including pharmacy, beauty, personal care, baby care, cleaning, and paper products; music, movies,
books, computer software, sporting goods, and toys, as well as electronics that consist of video game hardware
and software; apparel and accessories, such as apparel for women, men, boys, girls, toddlers, infants, and
newborns, as well as intimate apparel, jewelry, accessories, and shoes. The company also provides food and pet
supplies, including dry grocery, dairy, frozen food, beverages, candy, snacks, deli, bakery, meat, produce, and
pet supplies; and home furnishings and dcor, such as furniture, lighting, kitchenware, small appliances, home

dcor, bed and bath, home improvement, automotive, and seasonal merchandise comprising patio furniture and
holiday dcor. In addition, it offers in-store amenities. The company distributes its merchandise through a
network of distribution centers, as well as third parties and direct shipping from vendors. Further, it provides
general merchandise through its Website, Target.com; and branded proprietary Target Debit Card and Target
Credit Card. As of April 2, 2014, the company had 1,924 stores, including 1,797 in the United States and 127 in
Canada. Target Corporation was founded in 1902 and is headquartered in Minneapolis, Minnesota.

Competitors
Direct Competitor Comparison
Market Cap:
Employees:
Qtrly Rev Growth (yoy):
Revenue (ttm):
Gross Margin (ttm):
EBITDA (ttm):
Operating Margin (ttm):
Net Income (ttm):
EPS (ttm):
P/E (ttm):
PEG (5 yr. expected):
P/S (ttm):

TGT
38.27B
366,000
0.02
72.94B
0.29
5.96B
0.05
1.89B
2.96
20.40
1.27
0.53

AMZN
149.10B
117,300
0.23
78.12B
0.28
3.79B
0.01
300.00M
0.64
505.48
90.03
2.11

SHLD
4.12B
249,000
-0.07
35.62B
0.24
-692.00M
-0.04
-1.49B
-14.03
N/A
0.03
0.12

WMT
244.90B
2,200,000
0.01
477.18B
0.25
35.56B
0.06
15.68B
4.84
15.69
1.80
0.52

Industry
17.00B
30.10K
0.07
7.97B
0.29
814.72M
0.05
N/A
2.96
20.61
1.77
0.87

AMZN = Amazon.com Inc.

SHLD = Sears Holdings Corporation
WMT = Wal-Mart Stores Inc.
Industry = Discount, Variety Stores

Income Statement
View: Annual Data | Quarterly Data
Period Ending

Total Revenue
Cost of Revenue
Gross Profit
Operating Expenses
Research Development
Selling General and Administrative
Non Recurring
Others
Total Operating Expenses
Operating Income or Loss
Income from Continuing Operations
Total Other Income/Expenses Net

All numbers in thousands

Feb 1, 2014 Feb 2, 2013 Jan 28, 2012

72,596,000 73,301,000 69,865,000
51,160,000 50,568,000 47,860,000
21,436,000 22,733,000

22,005,000

15,375,000 15,381,000 14,552,000

(391,000)
(161,000)
2,223,000 2,142,000
2,131,000
-

4,229,000

5,371,000

5,322,000

Earnings Before Interest And Taxes

Interest Expense
Income Before Tax
Income Tax Expense
Minority Interest

4,229,000
1,126,000
3,103,000
1,132,000
-

5,371,000
762,000
4,609,000
1,610,000
-

5,322,000
866,000
4,456,000
1,527,000
-

Net Income From Continuing Ops

1,971,000

2,999,000

2,929,000

Net Income
Preferred Stock And Other Adjustments

1,971,000
-

2,999,000
-

2,929,000
-

Net Income Applicable To Common Shares

1,971,000

2,999,000

2,929,000

Non-recurring Events
Discontinued Operations
Extraordinary Items
Effect Of Accounting Changes
Other Items

Balance Sheet
View: Annual Data | Quarterly Data

All numbers in thousands

Feb 1, 2014

Feb 2, 2013

Jan 28, 2012

695,000
8,766,000
2,112,000

784,000
5,841,000
7,903,000
1,860,000

794,000
5,927,000
7,918,000
1,810,000

Total Current Assets

Long Term Investments
Property Plant and Equipment
Goodwill
Intangible Assets
Accumulated Amortization
Other Assets
Deferred Long Term Asset Charges

11,573,000
31,378,000
1,602,000
-

16,388,000
30,653,000
1,122,000
-

16,449,000
29,149,000
1,032,000
-

Total Assets
Liabilities
Current Liabilities
Accounts Payable
Short/Current Long Term Debt
Other Current Liabilities

44,553,000

48,163,000

46,630,000

11,617,000
1,160,000
-

11,037,000
2,994,000
-

10,501,000
3,786,000
-

Total Current Liabilities

12,777,000

14,031,000

14,287,000

Period Ending

Assets
Current Assets
Cash And Cash Equivalents
Short Term Investments
Net Receivables
Inventory
Other Current Assets

Long Term Debt

Other Liabilities
Deferred Long Term Liability Charges
Minority Interest
Negative Goodwill

12,622,000
1,490,000
1,433,000
-

14,654,000
1,609,000
1,311,000
-

13,697,000
1,634,000
1,191,000
-

Total Liabilities
Stockholders' Equity
Misc. Stocks Options Warrants
Redeemable Preferred Stock
Preferred Stock
Common Stock
Retained Earnings
Treasury Stock
Capital Surplus
Other Stockholder Equity

28,322,000

31,605,000

30,809,000

53,000
12,599,000
4,470,000
(891,000)

54,000
13,155,000
3,925,000
(576,000)

56,000
12,959,000
3,487,000
(681,000)

Total Stockholder Equity

16,231,000

16,558,000

15,821,000

Net Tangible Assets

16,231,000

16,558,000

15,821,000

Cash Flow
View: Annual Data | Quarterly Data

All numbers in thousands

Feb 1, 2014 Feb 2, 2013 Jan 28, 2012

Net Income
1,971,000 2,999,000
2,929,000
Operating Activities, Cash Flows Provided By or Used In
Depreciation
2,223,000 2,142,000
2,131,000
Adjustments To Net Income
33,000
150,000
637,000
Changes In Accounts Receivables
157,000
(217,000)
(187,000)
Changes In Liabilities
566,000
457,000
353,000
Changes In Inventories
(885,000)
15,000
(322,000)
Changes In Other Operating Activities
2,455,000
(221,000)
(107,000)
Period Ending

Total Cash Flow From Operating Activities

6,520,000 5,325,000
Investing Activities, Cash Flows Provided By or Used In
Capital Expenditures
(3,453,000) (3,277,000)
Investments
3,253,000
356,000
Other Cash flows from Investing Activities
(71,000)
66,000

5,434,000
(4,368,000)
151,000
37,000

Total Cash Flows From Investing Activities

(271,000) (2,855,000)
Financing Activities, Cash Flows Provided By or Used In
Dividends Paid
(1,006,000) (869,000)
Sale Purchase of Stock
(1,005,000) (1,515,000)
Net Borrowings
(4,353,000)
(88,000)
Other Cash Flows from Financing Activities
(16,000)

(750,000)
(1,753,000)
369,000
(6,000)

Total Cash Flows From Financing Activities

(2,140,000)

(6,364,000) (2,488,000)

(4,180,000)

Effect Of Exchange Rate Changes

26,000

8,000

(32,000)

Change In Cash and Cash Equivalents

(89,000)

(10,000)

(918,000)

Note: Dr. Kim, since Im not a finance major, I was unclear if you meant for us to compute each year
separately or together but I computed them together rather than separately.
12. Target NWC (Net Working Capital) = CA (Current Assets) CL (Current Liabilities) =2014: $11,573,000 +
2013: $16,388,000 = $27,961,000; 2014: $12,777,000 + 2013: $14,031,000 = $26,808,000 27,961,000 =
$1,153,000
13. EBIT (Earnings Before Interest and Taxes) = 2014: $4,229,000 + 2013: $5,371,000 =
$9,600,000
14. Income Taxes 2014: $1,132,000; 2013: $1,610,000 Total = $2,742,000
15. Depreciation 2014: $2,223,000; 2013: $2,142,000 Total = $4,365,000
16. OCG (Operating Cash Flow) = 2014: $6,520,000 + 2013: $5,325,000 Total = $11,845,000
17. CapEX (Capital Expenditures) - Depreciation = 2014: ($3,453,000) + 2013: ($3,277,000) =
($6,730,000) - $4,365,000 = ($2,365,000)
18. FCF (Free Cash Flow) = 2014: ($271,000) + 2013: ($2,855,000) = ($3,126,000)
19. NI (Net Income) = 2014: $1,971,000; 2013: $2,999,000 Total = $4,970,000
20. CR (Current Ratio) = Current Assets (CA)/Current Liabilities (CL) = 2014: $11,573,000 +
2013: $16,388.000 = $27,961,000; 2014: $12,777,000 + 2013: $14,031,000 =
$26,808,000/$27,961,000 = 95.88 times
21. TATO (Total Asset Turnover) = Sales/Total Assets = 2014: $15,375,000 + 2013: $15,381,000
= $30,756,000; 2014: $44,553,000 + 2013: $48,163,000 = $92,716,000; $30,756,000/$92,716,000
= 33.17 times
22. D/E (Debt-to-Equity) TD (Total Debt)/TE (Total Equity) = 2014: $28,322,000 + 2013:
$31,605,000 = $59,927,000; 2014: $16,231,000 + 2013: $16,558,000 = $32,789,000; 2014:
$59,927,000 2013: $32,789,000 = $27,138,000/$32,789,000 = 82.77%;
Interest Coverage Ratio = EBIT/Interest Charges = $9,600,000/$1,126,000 + 762,000 =
$18,880,000 = 197 times
23. ROE (Return on Equity) = Net Income/Total Equity =$4,970,000/$32,789,000 = 15.16%;
PM (Net Profit Margin) = Total Revenue Total Expenses/Total Revenue = Net Profit/Total
Revenue = 2014: $72,596,000 + 2013: $73,301,000 = $145,897,000; 2014: $4,229,000 + 2013:
$5,371,000 = $9,600,000 - $145,897,000 = $49,987,000/$145,897,000 = 34.26% X (TATO)
33.17 X 2.83 = 32.16%
Equity Multiplier = Total Assets/Total Stockholders Equity = (2014 + 2013)
$92,716,000/$32,789,000 = 2.83
24. Recent year: P/E (Price-to-Earnings) = Market Price Per Share/Earnings Per Share = $60.39/$2.96 =
20.40 times
25. Recent Year: M/B (Market-to-Book) = (Market Value Per Share/Book Value Per Share??? Ch.4 Notes Slide
#15) Market Capitalization/Total Stockholders Equity = $38.27B/$32,789,000 = 116.72 or 1.17 times
26 Beta = 0.81
27. E(Rj) (Expected Return on the Stock) = Rf (Risk-free Rate) 0.2 + B (Beta) 0.81 X (E(Rm) (Expected Market
Return) 16% Rf) 0.2 = 3.84%
28. Recent Year: DY (Dividend Yield) = RD (Recent Dividend)/SP (Stock Price) = 2.08/$60.39 = 3.44%
30. (16) 17.94; (17) 8.12; (18) 45.95; (19) 2,648,835; (20) 1.09; (21) 1.99; (22) 46.91; (23) 19.06) (24) 984.17

Comparable Company: Walmart

I was interested in this company mainly because I was just curious about what type of financial information I
could find out in order to complete this project assignment. I also wanted to know how this companys financial
status is compared to Target since I shop here more than I shop at Target.

Wal-Mart Stores Inc. (WMT)

-NYSE Follow
75.97 0.38(0.50%) Jul 25, 4:01PM EDT
After Hours : 75.97 0.00 (0.00%) Jul 25, 6:30PM EDT
76.35
Prev Close:
76.19
Open:
75.90 x 300
Bid:
76.03 x 300
Ask:
80.39
1y Target Est:
0.37
Beta:
Next Earnings Date: 14-Aug-14
Day's Range: 75.80 - 76.36
52wk Range: 71.51 - 81.37
3,948,442
Volume:
Avg Vol (3m): 5,660,730
Market Cap: 244.90B
15.69
P/E (ttm):
4.84
EPS (ttm):
Div & Yield: 1.92 (2.50%)

Business Summary
Wal-Mart Stores Inc. operates retail stores in various formats worldwide. The company operates through three
segments: Walmart U.S., Walmart International, and Sams Club. It operates discount stores, supermarkets,
supercenters, hypermarkets, warehouse clubs, restaurants, apparel stores, drug stores, and convenience stores,
as well as various retail Websites, such as walmart.com and samsclub.com. The companys stores offer meat,
produce, deli, bakery, dairy, frozen foods, alcoholic and nonalcoholic beverages, and floral and dry grocery;
health and beauty aids, baby products, household chemicals, paper goods, and pet supplies; electronics, toys,
cameras and supplies, photo processing services, cellular phones, cellular service plan contracts and prepaid
service, movies, music, video games, and books; and pharmacy, optical services, and over-the-counter drugs.
Its merchandise also include stationery, automotive accessories, hardware and paint, sporting goods, fabrics
and crafts, and seasonal merchandise; apparel for women, girls, men, boys, and infants, as well as shoes,
jewelry, and accessories; and home furnishings, housewares and small appliances, bedding, home dcor,
outdoor living, and horticulture products. The company also provides financial services and related products,
including money orders, prepaid cards, wire-transfers, check cashing, and bill payment. In addition, it offers

brand name merchandise, including hard-goods, soft-goods, and selected private-label items, such as
Members Mark and its own proprietary brands, such as Artisan Fresh, Bakers & Chef, Daily Chef, and
Simply Right. Further, the company operates banks that provide consumer financing programs. As of June 5,
2014, it operated approximately 11,000 stores under 71 banners in 27 countries; and ecommerce Websites in
10 countries. Wal-Mart Stores Inc. was founded in 1945 and is headquartered in Bentonville, Arkansas.

Competitors
Direct Competitor Comparison
Market Cap:
Employees:
Qtrly Rev Growth (yoy):
Revenue (ttm):
Gross Margin (ttm):
EBITDA (ttm):
Operating Margin (ttm):
Net Income (ttm):
EPS (ttm):
P/E (ttm):
PEG (5 yr. expected):
P/S (ttm):

WMT
244.90B
2,200,000
0.01
477.18B
0.25
35.56B
0.06
15.68B
4.84
15.69
1.80
0.52

PVT1
N/A
364,7951
N/A
102.28B1
N/A
N/A
N/A
1.74B1
N/A
N/A
N/A
N/A

COST
51.52B
103,000
0.07
109.60B
0.13
4.09B
0.03
1.98B
4.47
26.31
2.51
0.47

TGT
38.27B
366,000
0.02
72.94B
0.29
5.96B
0.05
1.89B
2.96
20.40
1.27
0.53

Pvt1 = Carrefour SA
COST = Costco Wholesale Corporation
TGT = Target Corp.
Industry = Discount, Variety Stores
1
= As of 2013

Income Statement
View: Annual Data | Quarterly Data
Period Ending

Total Revenue
Cost of Revenue
Gross Profit
Operating Expenses
Research Development
Selling General and Administrative
Non Recurring
Others
Total Operating Expenses
Operating Income or Loss
Income from Continuing Operations
Total Other Income/Expenses Net

All numbers in thousands

Jan 31, 2014 Jan 31, 2013 Jan 31, 2012

476,294,000 468,651,000 446,509,000
358,069,000 352,297,000 334,993,000
118,225,000 116,354,000 111,516,000
91,353,000
-

88,629,000
-

85,025,000
-

26,872,000

27,725,000

26,491,000

119,000

186,000

161,000

Industry
17.00B
30.10K
0.07
7.97B
0.29
814.72M
0.05
N/A
2.96
20.61
1.77
0.87

Earnings Before Interest And Taxes

Interest Expense
Income Before Tax
Income Tax Expense
Minority Interest

26,991,000 27,911,000 26,652,000

2,335,000
2,249,000
2,320,000
24,656,000 25,662,000 24,332,000
8,105,000
7,958,000
7,924,000
(673,000)
(757,000)
(688,000)

Net Income From Continuing Ops

16,551,000

17,704,000

144,000
-

52,000
-

Net Income
Preferred Stock And Other Adjustments

16,022,000
-

16,999,000
-

15,699,000
-

Net Income Applicable To Common

Shares

16,022,000

16,999,000

15,699,000

Non-recurring Events
Discontinued Operations
Extraordinary Items
Effect Of Accounting Changes
Other Items

16,408,000
(21,000)
-

Balance Sheet
View: Annual Data | Quarterly Data

All numbers in thousands

Jan 31, 2014

Jan 31, 2013

Jan 31, 2012

7,281,000
6,677,000
44,858,000
2,369,000

7,781,000
6,768,000
43,803,000
1,588,000

6,550,000
5,937,000
40,714,000
1,774,000

Total Current Assets

Long Term Investments
Property Plant and Equipment
Goodwill
Intangible Assets
Accumulated Amortization
Other Assets
Deferred Long Term Asset Charges

61,185,000
117,907,000
19,510,000
6,149,000
-

59,940,000
116,681,000
20,497,000
5,987,000
-

54,975,000
112,324,000
20,651,000
5,456,000
-

Total Assets
Liabilities
Current Liabilities
Accounts Payable
Short/Current Long Term Debt
Other Current Liabilities

204,751,000

203,105,000

193,406,000

57,174,000
12,082,000
89,000

59,099,000
12,719,000
-

55,952,000
6,348,000
-

69,345,000

71,818,000

62,300,000

Period Ending

Assets
Current Assets
Cash And Cash Equivalents
Short Term Investments
Net Receivables
Inventory
Other Current Assets

Total Current Liabilities

Long Term Debt

Other Liabilities
Deferred Long Term Liability Charges
Minority Interest
Negative Goodwill
Total Liabilities
Stockholders' Equity
Misc. Stocks Options Warrants
Redeemable Preferred Stock
Preferred Stock
Common Stock
Retained Earnings
Treasury Stock
Capital Surplus
Other Stockholder Equity

44,559,000
8,017,000
5,084,000
-

41,417,000
7,613,000
5,395,000
-

47,079,000
7,862,000
4,446,000
-

127,005,000

126,243,000

121,687,000

1,491,000
323,000
76,566,000
2,362,000
(2,996,000)

519,000
332,000
72,978,000
3,620,000
(587,000)

404,000
342,000
68,691,000
3,692,000
(1,410,000)

Total Stockholder Equity

76,255,000

76,343,000

71,315,000

Net Tangible Assets

56,745,000

55,846,000

50,664,000

Cash Flow
View: Annual Data | Quarterly Data

All numbers in thousands

Jan 31, 2014 Jan 31, 2013

Net Income
16,022,000 16,999,000
Operating Activities, Cash Flows Provided By or Used In
Depreciation
8,870,000
8,478,000
Adjustments To Net Income
515,000
417,000
Changes In Accounts Receivables
(566,000)
(614,000)
Changes In Liabilities
(590,000) 2,313,000
Changes In Inventories
(1,667,000) (2,759,000)
Changes In Other Operating Activities
-

Jan 31, 2012

15,699,000

Total Cash Flow From Operating Activities 23,257,000 25,591,000

Investing Activities, Cash Flows Provided By or Used In
Capital Expenditures
(13,115,000) (12,898,000)
Investments
(15,000)
(316,000)
Other Cash flows from Investing Activities
832,000
603,000

24,255,000

Period Ending

8,106,000
1,539,000
(796,000)
2,746,000
(3,727,000)
-

(13,510,000)
(3,548,000)
449,000

Total Cash Flows From Investing Activities (12,298,000) (12,611,000)

Financing Activities, Cash Flows Provided By or Used In
Dividends Paid
(6,861,000) (5,775,000)
Sale Purchase of Stock
(6,683,000) (7,600,000)
Net Borrowings
3,015,000
1,487,000
Other Cash Flows from Financing Activities
(488,000)
(84,000)

(16,609,000)

Total Cash Flows From Financing Activities (11,017,000) (11,972,000)

Effect Of Exchange Rate Changes
(442,000)
223,000

(8,458,000)
(33,000)

(5,574,000)
(6,298,000)
3,485,000
(71,000)

Change In Cash and Cash Equivalents

(500,000) 1,231,000
(845,000)
Note: Dr. Kim, since Im not a finance major, I was unclear if you meant for us to compute each year
separately or together but I computed them together rather than separately.
12. Walmart NWC (Net Working Capital) = CA (Current Assets) CL (Current Liabilities) = 2014:
$61,185,000 - 2013: $59,940,000 = $1,245,000; 2014: $69,345,000 + 2013: $71,811,000 = $141,156,000 $1,245,000= (-$139,911,000)
13. EBIT (Earnings Before Interest and Taxes) = 2014: $26,991,000 + 2013: $27,911,000 =
$54,902,000
14. Income Taxes: 2014: $8,105,000; 2013: $7,958,000 Total = $16,063,000
15. Depreciation: 2014: $8,870,000; 2013: $8,478,000 Total = $17,348,000
16. OCG (Operating Cash Flow) = 2014: $23,257,000 + 2013: $25,591,000 Total = $48,848,000
17. CapEX (Capital Expenditures) Depreciation = 2014: (-$13,115,000) + 2013: (-$12,898,000) =
(-$217,000) - $17,348,000 = ($17,131,000)
18. FCF (Free Cash Flow) = 2014: ($11,017,000) + 2013: ($11,972,000) = (-$955,000)
19. NI (Net Income) = 2014: $16,022,000; 2013: $16,999,000 Total = $33,021,000
20. CR (Current Ratio) = Current Assets (CA)/Current Liabilities (CL) = 2014: $61,185,000 +
2013: $59,940,000 = $121,125,000; 2014: $69,345,000 + 2013: $71,818,000 = $141,163,000/
$121,125,000 = 85.81 times
21. TATO (Total Asset Turnover) = Sales/Total Assets = 2014: $91,353,000 + 2013: $88,629,000
= $179,982,000; 2014: $204,751,000 + 2013: $203,105,000 = $407,856,000;
$179,982,000/$407,856,000 = 44.13 times
22. D/E (Debt-to-Equity) TD (Total Debt)/TE (Total Equity) = 2014: $127,005,000 + 2013:
$126,243,000 = $253,248,000; 2014: $76,255,000 + 2013:76,343,000 = $152,598,000; 2014:
$253,248,000 2013; $152,598,000 = $100,650,000/$152,598,000 = 65.96%
Interest Coverage Ratio = EBIT/Interest Charges = $54,902,000/2014: $2,335,000 + 2013:
$2,249,000 = $4,584,000 = 11.98 times or 120 times
23. ROE (Return on Equity) = Net Income/Total Equity = $33,021,000/$152,598,000 = 21.64%;
PM (Net Profit Margin) = Total Revenue Total Expenses/Total Revenue = Net Profit/Total
Revenue = 2014: $476,294,000 + 2013: $468,651,000 = $944,945,000; 2014: $26,872,000 +
2013: $27,725,000 = $54,597,000 - $944,945,000 = $890,348,000/$54,597,000 = 16.31% X
(TATO) 44.14 X 2.67 = 19.22%
Equity Multiplier = Total Assets/Total Stockholders Equity = (2014 + 2013)
$407,856,000/$152,598,000 = 2.67
24. Recent year: P/E (Price-to-Earnings) = Market Price Per Share/Earnings Per Share = $75.97/$4.84 =
15.70 times