Running head: FINANCIAL ANALYSIS 1 Financial Analysis of Target, Inc. Hailey L. Kauffman Southern New Hampshire University
FINANCIAL ANALYSIS 2 Financial Analysis of Target, Inc. Financial Analysis Financial Ratios Financial ratios are one method of analyzing financial statements. While there are many different financial ratios, some of the more common financial ratios used in accounting include the current ratio, the debt to equity ratio, the operating margin, and the return on equity (ROE). These ratios, as well as others, did fluctuate a little bit between Targets financial statements from 1/31/2017. 1/31/2018, and 1/31/2019. On the 2017 financial statement, Target had an annual revenue of 70.271 billion, a net income of $2.734 billion, a gross profit of $21.126 billion, a COGS of $49.145 billion, and operating expenses of $65.407 billion. On the 2018 financial statement, Target had an annual revenue of $72.714 billion, a new income of $2.914 billion, a gross profit of $21.589 billion, a COGS of $51.125 billion, and operating expenses of $68.490 billion. On the 2019 financial statement, Target had an annual revenue of $75.356 billion, a net income of $2.937 billion, a gross profit of $22.057 billion, a COGS of $51.125 billion, and operating expenses of $71.246 billion. The fluctuations of these numbers (and other numbers from the financial statements, including assets and liabilities) from year to year are what cause the fluctuations of the ratios from year to year. For example; the operating margin fluctuated from 2017 to 2019. In 2017 the operating margin was 6.92%. The operating margin decreased to 5.81% in 2018. In 2019, the operating margin decreased again to 5.45%. The operating margin is calculated using revenue data and operating income data. The revenues of Target did increase from 2017 to 2019. However, the operating income (also known as operating profit) is the amount of revenue left after deducting the operational costs. The operating expenses increased
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