Critique the Financial Analysis and Research Paper

Critique the Financial Analysis and - Research Paper Exampleand 122 in Canada. The company employs over 361,000 associates in the United States (Yahoo, 2013). In the U.S. there be about 5,000 department monetary funds with combined revenue of about $120 billion annually (Target, 2012). In the U.S. the discount department store industry is highly change state with the eight largest companies accounting for almost 100% of revenues. Wal-Mart and Target are leading the pack. In this industry the main factors driving demand are consumer spending connect to economic outlook and population change by reversalth. In order to retain profitable in this highly competitive industry driven by ever get margins companies depend on efficient supply chain management, high volumes, effective merchandising and competitive pricing in order to maintain profitability. Target is adjacent an industry trend of adding and converting major markets stores into supercenters which combine traditional gener al merchandise with a fully stocked grocery store to help drive store traffic, since customers spend more on groceries more than any other product category (Hoovers First Research, 2013). 2&3) There are significant business challenges in this industry which dictate the success of its major players. The industry is characterized by its dependence on high volumes and extremely low operating margins. In order to keep prices low the industry has a heavy dependence on imports in most of their key merchandise categories. In general wrong gross margin percentages for discount department stores can be 10-20% lower than traditional department stores. Although there is also growing recent and resistance from communities that perceives heavyweight discounters as a major threat to their local economy and small business community. In terms of economic growth for the industry it is forecast to grow at an annual rate of 1% from 2013-2017 (Hoovers First Research). We will analyze Target Corp. fo r its fiscal year ended 2/2/2013 and oppose it with the industry averages in terms of overall financial performance, financial ratio analysis and investment potential. In order to gauge the companys liquid we will analyze the quick ratio as well as their debt to equity ratio and compare it with the industry. We will look at the inventory overthrow ratio to gauge operational efficiency and inventory management compared with the industry. In order to measure management effectiveness, shareowners returns and profitability we will analyze the price/ meshwork ratio, return on equity, earnings per share and net profit margin versus industry averages (Yahoo). Target Industry Average Quick dimension .54 .50 Debt to Equity Ratio 91.53 67.6 Inventory Turnover Ratio 6.4 4.4 P/E Ratio 17.24 15.8 Return on Equity 14.84% 11.3% Earnings per Share 3.74 5.2 Net Profit Margin 4.17% 2.7 4) As one of the most successful discount department stores, Target must be extremely efficient in their operat ions in order to remain profitable. Target has a slightly higher debt to equity ratio compared with industry average. The company is effectively managing its levels of financial leverage in order to increase shareholder benefits and maximize growth and stock performance. By analyzing the companys quick ratio it demonstrates that the company has maintained an above average level of liquidity to meet their short and huge term liabilities as compared with