Question
Analysis and Interpretation of Profitability Balance sheets and income statements for Target Corporation follow. Income Statement For Fiscal Years Ended ($ millions) 2006 2005 2004
Analysis and Interpretation of Profitability Balance sheets and income statements for Target Corporation follow.
Income Statement | |||
---|---|---|---|
For Fiscal Years Ended ($ millions) | 2006 | 2005 | 2004 |
Sales | $ 51,271 | $ 45,682 | $ 40,928 |
Credit card revenues | 1,349 | 1,157 | 1,097 |
Total revenues | 52,620 | 46,839 | 42,025 |
Cost of sales | 34,927 | 31,445 | 28,389 |
Selling, general and administrative expenses | 11,185 | 9,797 | 8,657 |
Credit card expenses | 776 | 737 | 722 |
Depreciation and amortization | 1,409 | 1,259 | 1,098 |
Earnings before interest and income taxes | 4,323 | 3,601 | 3,159 |
Net interest expense | 463 | 570 | 556 |
Earnings before income taxes | 3,860 | 3,031 | 2,603 |
Provisions for income taxes | 1,452 | 1,146 | 984 |
Net earnings | $ 2,408 | $ 1,885 | $ 1,619 |
Balance Sheet | ||
---|---|---|
($ millions, except footnotes) | January 28, 2006 | January 29, 2005 |
Assets | ||
Cash and cash equivalents | $ 1,648 | $ 2,245 |
Credit card receivables | 5,666 | 5,069 |
Inventory | 5,838 | 5,384 |
Other current assets | 1,253 | 1,224 |
Total current assets | 14,405 | 13,922 |
Property and equipment | ||
Land | 4,449 | 3,804 |
Buildings and improvements | 14,174 | 12,518 |
Fixtures and equipment | 3,219 | 2,990 |
Computer hardware and software | 2,214 | 1,998 |
Construction-in-progress | 1,158 | 962 |
Accumulated depreciation | (6,176) | (5,412) |
Property and equipment, net | 19,038 | 16,860 |
Other noncurrent assets | 1,552 | 1,511 |
Total assets | $ 34,995 | $ 32,293 |
Liabilities and shareholders' investment | ||
Accounts payable | $ 6,268 | $ 5,779 |
Accrued and other current liabilities | 2,567 | 1,937 |
Current portion of long-term debt and notes payable | 753 | 504 |
Total current liabilities | 9,588 | 8,220 |
Long-term debt | 9,119 | 9,034 |
Deferred income taxes | 851 | 973 |
Other noncurrent liabilities | 1,232 | 1,037 |
Shareholders' investment | ||
Common stock | 73 | 74 |
Additional paid-in-capital | 2,121 | 1,810 |
Retained earnings | 12,013 | 11,148 |
Accumulated other comprehensive income (loss) | (2) | (3) |
Total shareholders' investment | 14,205 | 13,029 |
Total liabilities and shareholders' equity | $ 34,995 | $ 32,293 |
HINT: For Sales use "Total revenues" for your computations, when applicable.
(a) Compute net operating profit after tax (NOPAT) for 2006. Assume that the combined federal and statutory rate is: 38.3%. (Round your answer to the nearest whole number.) 2006 NOPAT = 2694 (do not need this answer)
(b) Compute net operating assets (NOA) for 2006 and 2005. 2006 NOA = $22,429.00 (do not need this answer) 2005 NOA = $20,322.00 (do not need this answer)
(c) Compute Targets RNOA, net operating profit margin (NOPM) and net operating asset turnover (NOAT) for 2006. (Do not round until final answer. Round two decimal places. Do not use NOPM x NOAT to calculate RNOA.) 2006 RNOA =
2006 NOPM = Answer 5.12 (do not need this answer)
2006 NOAT =
(d) Compute net nonoperating obligations (NNO) for 2006 and 2005. 2006 NNO = 2005 NNO =
(e) Compute return on equity (ROE) for 2006. (Do not round until final answer. Round answer two decimal places.) 2006 ROE = Answer
(f) Infer the nonoperating return component of ROE for 2006. (Use answers from above to calculate. Round your answer to two decimal places.) 2006 nonoperating return = Answer
Specifically I need the ones in bold. I am not sure what I am doing wrong.
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