Case_-_Target_Versus_WalMart_-2010-2

Case_-_Target_Versus_WalMart_-2010-2 - MANAGEMENT 120A CASE...

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Page | 1 MANAGEMENT 120A CASE 2 Target versus Wal-Mart DEPRECIATION DIFFERENCES Objective: Depreciation differences and financial statement analysis. Target Corporation is a general merchandise retailer. Its Target and Supertarget stores are part of the upscale discount chain. Wal-Mart Stores, Inc. operates retail stores in various retailing format in all 50 states in the United States. The company’s merchandising operations serve its customers primarily through the operation of three segments: the Wal-Mart stores segment includes its discount stores, Supercenters, and Neighborhood Markets in the United States; the Sam’s Club segment includes the warehouse membership clubs in the United States; the international segment includes all of its operations in Argentina, Brazil, Canada, China, Japan, Germany, Korea, Mexico, Puerto Rico, and the United Kingdom. Information taken from both firms’ 2010 annual reports to shareholders follows: Consolidated Statements of Operations (millions, except per share data) 2009 2008 2007 Sales $ 63,435 $ 62,884 $ 61,471 Credit card revenues 1,922 2,064 1,896 Total revenues 65,357 64,948 63,367 Cost of sales 44,062 44,157 42,929 Selling, general and administrative expenses 13,078 12,954 12,670 Credit card expenses 1,521 1,609 837 Depreciation and amortization 2,023 1,826 1,659 Earnings before interest expense and income taxes 4,673 4,402 5,272 Net interest expense Nonrecourse debt collateralized by credit card receivables 97 167 133 Other interest expense 707 727 535 Interest income (3 ) (28 ) (21 ) Net interest expense 801 866 647 Earnings before income taxes 3,872 3,536 4,625 Provision for income taxes 1,384 1,322 1,776 Net earnings $ 2,488 $ 2,214 $ 2,849 Basic earnings per share $ 3.31 $ 2.87 $ 3.37 Diluted earnings per share $ 3.30 $ 2.86 $ 3.33 Weighted average common shares outstanding Basic 752.0 770.4 845.4 Diluted 754.8 773.6 850.8
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Management 120A Page | 2 Consolidated Statements of Financial Position
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This note was uploaded on 05/31/2010 for the course MGMT 120A taught by Professor Litt during the Spring '08 term at UCLA.

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Case_-_Target_Versus_WalMart_-2010-2 - MANAGEMENT 120A CASE...

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