Target's Financial Analysis

Current Situation (roughly one page)

Current Performance ? Target is a publicly traded discount retail company in the United States. It is the second largest discount retailer in the United States, Wal-Mart being the largest. The company is ranked 36th on the fortune 500 as of 2015 and is a component of the Standard & Poor?s 500 index. Target generates over $70 Billion in annual revenue. Sales consist of household essentials, apparel, food, pet supplies, home and furnishing d?cor etc. With its ?one-stop shop? format, customers have access to a variety of products and services.

Strategic Posture ? Target?s corporate mission statement focuses its leaders and employees on fulfilling the promise of the Target brand.

Mission ? ?Our mission is to

The discount retail industry in the United States is a profitable industry with fierce competition ? one that has led to bankruptcy of a few retailers. Walmart happens to be one of the big players in the industry today, mainly known for its low and competitive pricing. Walmart is able to offer low price through the optimization of its supply chain and inventory system management. Its point of sale system is connected to its inventory system which is also connected to its vendors order management system. When a product is purchased and scanned out at the check-lane (point of sale), the point of sale system signals to the inventory system which in turn signal to the vendor order management system, the vendor order management system recognizes the inventory depletion and writes a replenish order and have the item shipped to the store. Walmart?s inventory system and strong vendor communication enables its insight to its inventory need and they can adjust their production

Target experienced a net loss of about $3.6 billion that year due to the discontinued operations of Canadian market (resulting in a pretax impairment loss on deconsolidation and other charges), partially offset by higher revenues. In fiscal 2015, the company's net cash provided by the operating activities decreased by 32% due to the absence of proceeds on sale of accounts receivable originated at Target and a change in accounts payable and accrued liabilities. (Vault, 2015)

Current Ratio is a short term indicator of a company?s ability to pay its short-term liabilities. It measures whether a company has enough resources to cover its debts over the next 12 months. The higher the number, the more capable a company is of fulfilling its obligations. Target has a higher current ratio when compared to Walmart its largest competitor and is not at any risk of not being able to meet any of its short-term liabilities. Target?s average current ratio over the last 5 years is about 1.3 compared to Walmart at