Chapter 7 Assignment (Adapted from ATC 7-1 in Text)

Use the Target Corporation Form 10-K to answer the following questions related to Targets 2018 Fiscal Year. Note that Targets Fiscal Year ends in late January or early February, so the 2018 Fiscal Year ends February 2, 2019. You will need to use the financial statements as well as notes to the financial statements to answer the questions. Show your calculations and extend all decimal points at least 2 places.

1. What is the amount of Targets total liabilities at the end of FY 2018 and FY 2017 (Hint: use the Statement of Financial Position)?

2. What percentage of Target's assets was being financed with liabilities at the end of FY 2018 and FY 2017 versus the percentage of assets financed with shareholders' equity (Hint: use the Statement of Financial Position)?

3. Comment on the change in total liabilities in $ amounts and as a percentage of total assets between 2017 and 2018. Is this a positive or negative and why?

4. What was the average interest rate that Target paid on its long term debt at the end of FY 2018 (Hint: use the footnotes beginning on page 40)?

5. Target reported Accrued and Other Liabilities of $ 4,201 as of the end of FY 2018. What was the largest subcategory of liabilities included in this account (Hint: use the footnotes beginning on page 40)?

Consolidated Statements of Financial Position USD I$) $ in Millions Eeb.02,2019 Eeb.03,2018 Jan.28, 201z $2,512 $ 2,643 $ 1,556 Cash and cash equivalents 8,309 9,497 8,597 Inventory 1,169 1,466 1,300 Other current assets 11,990 12,540 12,519 Total current assets Property and equipment 6,106 6,064 29,240 27,611 28,131 Buildings and improvements Fxtures and equipment Computer hardware and software Construction-in-progress 5,623 5,912 2,651 2,645 200 440 460 42,071 42,934 44,220 Total Property and Equipment at Cost Accumulated depreciation 17,413 18,687 24,536 24,658 25,533 Property and equipment, net Operating lease assets 1,884 1,965 783 1,343 Other noncurrent assets 37,431 41,290 40,303 Total assets Liabilities and shareholders' investment Accounts payable 7,252 8,677 4,094 9,761 3,737 Accrued and other current liabilities 281 1,718 12,707 1,052 Current portion of long-term debt and other 15,014 10,223 13,052 Total current liabilities 11,031 11,117 Long-term debt and other borrowings Noncurrent operating lease liabilities 1,924 2,004 693 861 972 Deferred income taxes 1,780 1,866 1,879 Other noncurrent liabilities 13,771 14,979 15,600 Total noncurrent liabilities 28,652 26,478 29,993 Total Liabilities Shareholders'investment 43 Common stock 5,661 5,884 5,858 6,042 Additional paid-in capital 6,495 6,017 Retained earnings (638) Accumulated other comprehensive loss 11,651 11,297 Total shareholders' investment Total liabilities and shareholders' investment $37,431 41,290 Common Stock Authorized 6,000,000,000 shares, $0.0833 par value 517,761,600 Issued and outstanding shares at February 2, 2019 541,681,670 Issued and outstanding shares at February 3, 2018 Preferred Stock Authorized 5,000,000 shares, $0.01 par value; no shares were issued or outstanding at Consolidated Statements of Financial Position USD I$) $ in Millions Eeb.02,2019 Eeb.03,2018 Jan.28, 201z $2,512 $ 2,643 $ 1,556 Cash and cash equivalents 8,309 9,497 8,597 Inventory 1,169 1,466 1,300 Other current assets 11,990 12,540 12,519 Total current assets Property and equipment 6,106 6,064 29,240 27,611 28,131 Buildings and improvements Fxtures and equipment Computer hardware and software Construction-in-progress 5,623 5,912 2,651 2,645 200 440 460 42,071 42,934 44,220 Total Property and Equipment at Cost Accumulated depreciation 17,413 18,687 24,536 24,658 25,533 Property and equipment, net Operating lease assets 1,884 1,965 783 1,343 Other noncurrent assets 37,431 41,290 40,303 Total assets Liabilities and shareholders' investment Accounts payable 7,252 8,677 4,094 9,761 3,737 Accrued and other current liabilities 281 1,718 12,707 1,052 Current portion of long-term debt and other 15,014 10,223 13,052 Total current liabilities 11,031 11,117 Long-term debt and other borrowings Noncurrent operating lease liabilities 1,924 2,004 693 861 972 Deferred income taxes 1,780 1,866 1,879 Other noncurrent liabilities 13,771 14,979 15,600 Total noncurrent liabilities 28,652 26,478 29,993 Total Liabilities Shareholders'investment 43 Common stock 5,661 5,884 5,858 6,042 Additional paid-in capital 6,495 6,017 Retained earnings (638) Accumulated other comprehensive loss 11,651 11,297 Total shareholders' investment Total liabilities and shareholders' investment $37,431 41,290 Common Stock Authorized 6,000,000,000 shares, $0.0833 par value 517,761,600 Issued and outstanding shares at February 2, 2019 541,681,670 Issued and outstanding shares at February 3, 2018 Preferred Stock Authorized 5,000,000 shares, $0.01 par value; no shares were issued or outstanding at