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Compute ROA, Profit Margin, and Asset Turnover Refer to the financial information for Target Corporation, presented below: Target Corporation Balance Sheets January 31, February
Compute ROA, Profit Margin, and Asset Turnover Refer to the financial information for Target Corporation, presented below: Target Corporation Balance Sheets January 31, February 1, ($ millions) 2015 2014 Assets Cash and cash equivalents Inventory Other current assets Total current assets Property and equipment, net $2,210 $670 8,790 8,278 3.087 2.625 14,087 11,573 25,958 26,412 Other noncurrent assets Total assets Liabilities and shareholders' investment Accounts payable 1.359 6.568 $41.404 $44.553 $7,759 $7,335 Accrued and other current liabilities Current portion of long-term debt and notes payable 3,886 4,299 91 1.143 Total current liabilities Long-term debt Deferred income taxes Other noncurrent liabilities 11,736 12,777 12,705 11,429 1,321 1,349 1,645 2,767 Total shareholders' investment Total liabilities and shareholders' investment 13.997 16.231 $41.404 $44.553 Target Corporation Income Statement ($ millions) Sales revenue Cost of sales Selling, general and administrative expenses Depreciation and amortization Earnings from continuing operations before interest and income taxes Net interest expense Earnings from continuing operations before income taxes Provision for income taxes, Fiscal year ended January 31, 2015 $72,618 51,278 14,676 2.129 4,535 882 3,653 1.204 2,449 (4.085) $(1.636) Net earnings from continuing operations Discontinued operations, net of tax Net earnings (loss) a. Compute its return on assets (ROA) for the fiscal year ending January 31, 2015. Compute ROA using net earnings (loss). Assume a statutory tax rate of 35%. Round your answer to one decimal place. Use negative sign with answer, if appropriate. Return on Assets = % b. Disaggregate ROA into profit margin (PM) and asset turnover (AT). Round your answers to one decimal place. Use negative sign with answers, if appropriate. Profit Margin = Asset Turnover = %
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