Financial Analysis/Stock Analysis Project
Target Inc.
Use link on Blackboard
Year of Annual Report 2019 published in 2020
4 REQUIRED PARTS- PROJECT MUST BE word processed--simply answer each question with this document.
Name:________________ Corporation______________________________
Part I (worth 20% of this assignment) use the first page of your Target 10-k report to answer the following questions
Answer the following:
- Date of report?
- In what State are they incorporated?
- Where are the corporate headquarters?
- What is the par value of the stock?
- What stock exchange is the corporation listed on?
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(0) OF THE SECURITIES EXCHANGE ACT OF 1954 For the focal year ended February 1, 2000 TRANSITION REPORT PURSUANT TO SECTION 13 OR 14 OF THE SECURITIES EXCHANGE ACT OF 1934 For the ration period from_to Camion.com OR TARGET CORPORATION care a intrats died in its cha) Minnesota -0215170 (9 or other action of incorporation organization G.R.S. Employer certification e) 2000 Nicolet Mal, Minneapolis, Minnes 003 Adres al principal cutives Zip Code Registrar's leptorumbeindudirgus de 2006-c07a Fernar, former dress and former focalyese. I changed since last report NA Securities regement Section 120 of the Sun Ege Act of 100 Title och Trading Symbol umedech change on which registered Camman stock par value 0.00 per shers TGT New York Stock Exchange Indicate by check out the registration credidelined inded of the Securities Actes Indicate by check out the registrant is not required to the pots prut to Sadion 13 Section of the dealex No-Checking the box above will not rewany grunt required to the reports pursuant to Sedien 13 154) twDcture Act from their litice under these Indice by check me what the registrart () hustled will reports required to be led by Section 1315 of the Secure Exchange Act of 1934 during the preceding 12 months or for sucher period that the registrant was required to such report, and has been touching requirements for the past cluye: Yes No Indice by check mark whether the registranth subtelectronically active Date Plequired to be stated prut to Rule 405 al Regulation S-T (3232.405 of this chapter during the preceding 12 marts fer tar ca starter period that the registrant was required to submit such Yes No Indicate by check mask dudes of Greater pumuwt to the 105 of Regulation SK (3229.00 tis chapter is not contained herein, we will not be contained in the best of knowledge, in der passer indian manis corporated by twence in Perth Fam 20 w amendment to this Form 10- Large de Aariarainai thar - Non acceder Smaller reporting Emerging growcy Fannagire prout company, indicate by check at the registrant weekend met te le the danced transition partied for complying with any new or wted Brandal accounting Standards provided pursuant to Section 107 of the change Act. Indicate by check mark whether the registrart is a steal company is defined in Rule 12 of the day. Yes No The Court of the voting stocked by names of the grants of August 2, 2018,541,576586 cas based on the desing price of 1.52 per share of Common Stocksported on the New York Stock Exchange Composite Index Indicate the number of sharing och registrada al Common Stocks of the west practicabled. Totaltures of Common Stock, par values outstanding of Mah 5, 2000, were 1000 DOCUMENTS INCORPORATED BY REFERENCE Pations of Tage Proy Suert for the Meeting Shaders to be held on 10. 2020, are incorporated into Part SECUTIVE SUMMARY ANALYSIS OF OPERATORS Earnings Per Share From Percent Change Continuing Operations 2019 2018 2017 2019/2018 2018/2017 GAAP diluted camins per share 6.34 $ 5.50 $ 5.29 15.4 % 4.0 % Adjustments 0.05 (0.10) (0.60) Adjusted diluted earnings per share 6.39 $ 5.39 $ 4.69 18.4 % 15.1 % Note: Amounts may not foot due to rounding. Adjusted diluted eamings per share from continuing operations (Adjusted EPS), a non-GAAP metric, excludes the impact of certain items. Management believes that Adjusted EPS is useful in providing period to period comparisons of the results of our continuing operations A reconciliation of non-GAAP finandal measures to GAAP measures is provided on page 21 Consisted of 53 weeks. We report after-tax return on invested capital (ROIC) from continuing operations because we believe ROIC provides a meaningful measure of our capital-allocation effectiveness over time. For the trailing twelve months ended February 1, 2020, ROIC was 16.0 percent, compared with 14.7 percent for the trailing twelve months ended February 2, 2019. The calculation of ROIC is provided on page 22 Analysis of Results of Operations Summary of Operating Income Percent Change (dollars in millions) 2019 2018 2017 2019/2018 2018/2017 Sales 77,130 74,433 5 71,786 3.6 % 3.7% Other revenue 923 6.3 (0.5) Total revenue 78,112 75,356 72,714 3.7 3.6 Cost of sales 54,854 53,299 51,125 2.9 SG&A expenses 16,233 15,723 15,140 3.2 3.9 Depreciation and amortization (exclusive of depreciation included in cost of sales) 2,357 2,224 2.225 6.0 Operating income 4,658 s 4,110 S 4,224 13.3 % (2.7) Consisted of 53 weeks 55 Rate Analysis 2019 2018 2017 Gross margin rate 28.9% 28.4% SGSA expense rate 20.8 20.9 20.8 Depreciation and amortization (exclusive of depreciation included in cost of sales) expense rate 3.0 3.1 Operating income margin rate 6.0 5.8 Note: Gross margin rate is calculated as gross margin (sales less cost of sales divided by sales. All other rates are calculated by dividing the applicable amount by total revenue Consisted of 53 weeks A discussion regarding Results of Operations and Analysis of Financial Condition for the year ended February 2, 2019. as compared to the year ended February 3, 2018, included in Part II, Item 7, MD&A to our Annual Report on Form 10-K for the fiscal year ended February 2, 2019. Consolidated Statements of Shareholders' Investment Common Stock Additional Accumulated Other Stock Par Paid-in Retained Comprehensive (millions) Shares Value Capital Earnings (Loss) / Income Total January 28, 2017 556.2 $ 46 $ 5,661 $ 5,846 $ (638) $ 10,915 Net earnings 2,914 2,914 Other comprehensive income 8 8 Dividends declared (1,356) (1,356) Repurchase of stock (17.6) (1) (1.026) (1,027) Stock options and awards 3.1 197 197 Reclassification of tax effects to retained earnings 117 (117) February 3, 2018 541.7 $ 45 $ 5,858 $ 6,495 $ (747) $ 11,651 Net earnings 2,937 2,937 Other comprehensive loss (58) (58) Dividends declared (1,347) (1,347) Repurchase of stock (27.2) (2) (2,068) (2,070) Stock options and awards 3.3 184 184 February 2, 2019 517.8 $ 43 $ 6,042 $ 6,017 $ (805) $ 11,297 Net earings 3.281 3.281 Other comprehensive loss (63) (63) Dividends declared (1,345) (1,345) Repurchase of stock (16.0) (1) (1,520) (1,521) Stock options and awards 2.4 184 184 February 1, 2020 504.2 $ 42 $ 6,226 $ 6,433 $ (868) $ 11,833 We declared $2.62, $2.54, and $2.46 dividends per share for the twelve months ended February 1, 2020, February 2, 2019, and February 3, 2018, respectively. I ATEITI 11 See accompanying Notes to Consolidated Financial Statements. TARGET CORPORATION 2019 Form 10-K Consolidated Statements of Financial Position 2019 February 1, February 2, (millions, except footnotes) 2020 Assets Cash and cash equivalents 2,577 $ 1,556 Inventory 8,992 9,497 Other current assets 1,333 1,466 Total current assets 12,902 12,519 Property and equipment Land 6,036 6,064 Buildings and improvements 30,603 29,240 Fixtures and equipment 6,083 5,912 Computer hardware and software 2,692 2,544 Construction-in-progress 533 460 Accumulated depreciation (19.664) (18,687) Property and equipment, net 26,283 25,533 Operating lease assets 2,236 1.965 Other noncurrent assets 1,358 1,273 Total assets $ 42,779 $ 41,290 Liabilities and shareholders' investment Accounts payable 9,920 $ 9,761 Accrued and other current liabilities 4,406 4,201 Current portion of long-term debt and other borrowings 161 1,052 Total current liabilities 14,487 15,014 Long-term debt and other borrowings 11,338 10,223 Noncurrent operating lease liabilities 2,275 2,004 Deferred income taxes 1,122 972 Other noncurrent liabilities 1,724 1,780 Total noncurrent liabilities 16,459 14,979 Shareholders' investment Common stock 42 43 Additional paid-in capital 6,226 6,042 Retained earnings 6,433 6,017 Accumulated other comprehensive loss (868) (805) Total shareholders' investment 11,833 11,297 Total liabilities and shareholders' investment $ 42,779 $ 41,290 Common Stock Authorized 6,000,000,000 shares, S0.0833 par value; 504,198,962 shares issued and outstanding as of February 1, 2020, 517,761,600 shares issued and outstanding as of February 2, 2019. Preferred Stock Authorized 5,000,000 shares. $0.01 par value; no shares were issued or outstanding during any period presented. See accompanying Notes to Consolidated Financial Statements Significant Financial Instruments not measured at Fair Values As of February 1, As of February 2 2020 2019 Carrying Fair Carrying Fair (millions) Amount Value Amount Value Long-term debt, including current portion $ 9,992 $ 11,864 $ 10,247 $ 10,808 The carrying amounts of certain other current assets, commercial paper, accounts payable, and certain accrued and other current liabilities approximate fair value due to their short-term nature. The fair value of debt is generally measured using a discounted cash flow analysis based on current market interest rates for the same or similar types of financial instruments and would be classified as Level 2. These amounts exclude commercial paper, unamortized swap valuation adjustments, and lease liabilities. 7. Cash and Cash Equivalents Cash equivalents include highly liquid investments with an original maturity of three months or less from the time of purchase. Cash equivalents also include amounts due from third-party financial institutions for credit and debit card transactions. These receivables typically settle in five days or less. 1.556 Cash and Cash Equivalents February 1, February 2, (millions) 2020 2019 Cash 326 $ 359 Short-term investments 1,810 769 Receivables from third-party financial institutions for credit and debit card transactions 441 428 Cash and cash equivalents - $ 2,577 $ We have access to these funds without any significant restrictions, taxes or penalties. As of February 1, 2020 and February 2, 2019, we reclassified book overdrafts of $209 million and $242 million, respectively, to Accounts Payable and $23 million and $25 million, respectively, to Accrued and Other Current Liabilities. 8. Inventory The vast majority of our inventory is accounted for under the retail inventory accounting method (RIM) using the last-in, first-out (LIFO) method. Inventory is stated at the lower of LIFO cost or market. Inventory cost includes the amount we pay to our suppliers to acquire inventory, freight costs incurred to deliver product to our distribution centers and stores, and import costs, reduced by vendor income and cash discounts. Distribution center operating costs, including compensation and benefits, are expensed in the period incurred. Inventory is also reduced for estimated losses related to shrink and markdowns. The LIFO provision is calculated based on inventory levels, markup rates, and internally measured retail price indices. Under RIM, inventory cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to the inventory retail value. RIM is an averaging method that has been widely used in the retail industry due to its practicality. The use of RIM will result in inventory being valued at the lower of cost or market because permanent markdowns are taken as a reduction of the retail value of inventory 9. Other Current Assets Other Current Assets (millions) Income tax and other receivables Vendor income receivable Prepaid expenses Other Total $ February 1. 2020 498 $ 464 154 217 1,333 $ February 2 2019 632 468 157 209 1,466 $ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(0) OF THE SECURITIES EXCHANGE ACT OF 1954 For the focal year ended February 1, 2000 TRANSITION REPORT PURSUANT TO SECTION 13 OR 14 OF THE SECURITIES EXCHANGE ACT OF 1934 For the ration period from_to Camion.com OR TARGET CORPORATION care a intrats died in its cha) Minnesota -0215170 (9 or other action of incorporation organization G.R.S. Employer certification e) 2000 Nicolet Mal, Minneapolis, Minnes 003 Adres al principal cutives Zip Code Registrar's leptorumbeindudirgus de 2006-c07a Fernar, former dress and former focalyese. I changed since last report NA Securities regement Section 120 of the Sun Ege Act of 100 Title och Trading Symbol umedech change on which registered Camman stock par value 0.00 per shers TGT New York Stock Exchange Indicate by check out the registration credidelined inded of the Securities Actes Indicate by check out the registrant is not required to the pots prut to Sadion 13 Section of the dealex No-Checking the box above will not rewany grunt required to the reports pursuant to Sedien 13 154) twDcture Act from their litice under these Indice by check me what the registrart () hustled will reports required to be led by Section 1315 of the Secure Exchange Act of 1934 during the preceding 12 months or for sucher period that the registrant was required to such report, and has been touching requirements for the past cluye: Yes No Indice by check mark whether the registranth subtelectronically active Date Plequired to be stated prut to Rule 405 al Regulation S-T (3232.405 of this chapter during the preceding 12 marts fer tar ca starter period that the registrant was required to submit such Yes No Indicate by check mask dudes of Greater pumuwt to the 105 of Regulation SK (3229.00 tis chapter is not contained herein, we will not be contained in the best of knowledge, in der passer indian manis corporated by twence in Perth Fam 20 w amendment to this Form 10- Large de Aariarainai thar - Non acceder Smaller reporting Emerging growcy Fannagire prout company, indicate by check at the registrant weekend met te le the danced transition partied for complying with any new or wted Brandal accounting Standards provided pursuant to Section 107 of the change Act. Indicate by check mark whether the registrart is a steal company is defined in Rule 12 of the day. Yes No The Court of the voting stocked by names of the grants of August 2, 2018,541,576586 cas based on the desing price of 1.52 per share of Common Stocksported on the New York Stock Exchange Composite Index Indicate the number of sharing och registrada al Common Stocks of the west practicabled. Totaltures of Common Stock, par values outstanding of Mah 5, 2000, were 1000 DOCUMENTS INCORPORATED BY REFERENCE Pations of Tage Proy Suert for the Meeting Shaders to be held on 10. 2020, are incorporated into Part SECUTIVE SUMMARY ANALYSIS OF OPERATORS Earnings Per Share From Percent Change Continuing Operations 2019 2018 2017 2019/2018 2018/2017 GAAP diluted camins per share 6.34 $ 5.50 $ 5.29 15.4 % 4.0 % Adjustments 0.05 (0.10) (0.60) Adjusted diluted earnings per share 6.39 $ 5.39 $ 4.69 18.4 % 15.1 % Note: Amounts may not foot due to rounding. Adjusted diluted eamings per share from continuing operations (Adjusted EPS), a non-GAAP metric, excludes the impact of certain items. Management believes that Adjusted EPS is useful in providing period to period comparisons of the results of our continuing operations A reconciliation of non-GAAP finandal measures to GAAP measures is provided on page 21 Consisted of 53 weeks. We report after-tax return on invested capital (ROIC) from continuing operations because we believe ROIC provides a meaningful measure of our capital-allocation effectiveness over time. For the trailing twelve months ended February 1, 2020, ROIC was 16.0 percent, compared with 14.7 percent for the trailing twelve months ended February 2, 2019. The calculation of ROIC is provided on page 22 Analysis of Results of Operations Summary of Operating Income Percent Change (dollars in millions) 2019 2018 2017 2019/2018 2018/2017 Sales 77,130 74,433 5 71,786 3.6 % 3.7% Other revenue 923 6.3 (0.5) Total revenue 78,112 75,356 72,714 3.7 3.6 Cost of sales 54,854 53,299 51,125 2.9 SG&A expenses 16,233 15,723 15,140 3.2 3.9 Depreciation and amortization (exclusive of depreciation included in cost of sales) 2,357 2,224 2.225 6.0 Operating income 4,658 s 4,110 S 4,224 13.3 % (2.7) Consisted of 53 weeks 55 Rate Analysis 2019 2018 2017 Gross margin rate 28.9% 28.4% SGSA expense rate 20.8 20.9 20.8 Depreciation and amortization (exclusive of depreciation included in cost of sales) expense rate 3.0 3.1 Operating income margin rate 6.0 5.8 Note: Gross margin rate is calculated as gross margin (sales less cost of sales divided by sales. All other rates are calculated by dividing the applicable amount by total revenue Consisted of 53 weeks A discussion regarding Results of Operations and Analysis of Financial Condition for the year ended February 2, 2019. as compared to the year ended February 3, 2018, included in Part II, Item 7, MD&A to our Annual Report on Form 10-K for the fiscal year ended February 2, 2019. Consolidated Statements of Shareholders' Investment Common Stock Additional Accumulated Other Stock Par Paid-in Retained Comprehensive (millions) Shares Value Capital Earnings (Loss) / Income Total January 28, 2017 556.2 $ 46 $ 5,661 $ 5,846 $ (638) $ 10,915 Net earnings 2,914 2,914 Other comprehensive income 8 8 Dividends declared (1,356) (1,356) Repurchase of stock (17.6) (1) (1.026) (1,027) Stock options and awards 3.1 197 197 Reclassification of tax effects to retained earnings 117 (117) February 3, 2018 541.7 $ 45 $ 5,858 $ 6,495 $ (747) $ 11,651 Net earnings 2,937 2,937 Other comprehensive loss (58) (58) Dividends declared (1,347) (1,347) Repurchase of stock (27.2) (2) (2,068) (2,070) Stock options and awards 3.3 184 184 February 2, 2019 517.8 $ 43 $ 6,042 $ 6,017 $ (805) $ 11,297 Net earings 3.281 3.281 Other comprehensive loss (63) (63) Dividends declared (1,345) (1,345) Repurchase of stock (16.0) (1) (1,520) (1,521) Stock options and awards 2.4 184 184 February 1, 2020 504.2 $ 42 $ 6,226 $ 6,433 $ (868) $ 11,833 We declared $2.62, $2.54, and $2.46 dividends per share for the twelve months ended February 1, 2020, February 2, 2019, and February 3, 2018, respectively. I ATEITI 11 See accompanying Notes to Consolidated Financial Statements. TARGET CORPORATION 2019 Form 10-K Consolidated Statements of Financial Position 2019 February 1, February 2, (millions, except footnotes) 2020 Assets Cash and cash equivalents 2,577 $ 1,556 Inventory 8,992 9,497 Other current assets 1,333 1,466 Total current assets 12,902 12,519 Property and equipment Land 6,036 6,064 Buildings and improvements 30,603 29,240 Fixtures and equipment 6,083 5,912 Computer hardware and software 2,692 2,544 Construction-in-progress 533 460 Accumulated depreciation (19.664) (18,687) Property and equipment, net 26,283 25,533 Operating lease assets 2,236 1.965 Other noncurrent assets 1,358 1,273 Total assets $ 42,779 $ 41,290 Liabilities and shareholders' investment Accounts payable 9,920 $ 9,761 Accrued and other current liabilities 4,406 4,201 Current portion of long-term debt and other borrowings 161 1,052 Total current liabilities 14,487 15,014 Long-term debt and other borrowings 11,338 10,223 Noncurrent operating lease liabilities 2,275 2,004 Deferred income taxes 1,122 972 Other noncurrent liabilities 1,724 1,780 Total noncurrent liabilities 16,459 14,979 Shareholders' investment Common stock 42 43 Additional paid-in capital 6,226 6,042 Retained earnings 6,433 6,017 Accumulated other comprehensive loss (868) (805) Total shareholders' investment 11,833 11,297 Total liabilities and shareholders' investment $ 42,779 $ 41,290 Common Stock Authorized 6,000,000,000 shares, S0.0833 par value; 504,198,962 shares issued and outstanding as of February 1, 2020, 517,761,600 shares issued and outstanding as of February 2, 2019. Preferred Stock Authorized 5,000,000 shares. $0.01 par value; no shares were issued or outstanding during any period presented. See accompanying Notes to Consolidated Financial Statements Significant Financial Instruments not measured at Fair Values As of February 1, As of February 2 2020 2019 Carrying Fair Carrying Fair (millions) Amount Value Amount Value Long-term debt, including current portion $ 9,992 $ 11,864 $ 10,247 $ 10,808 The carrying amounts of certain other current assets, commercial paper, accounts payable, and certain accrued and other current liabilities approximate fair value due to their short-term nature. The fair value of debt is generally measured using a discounted cash flow analysis based on current market interest rates for the same or similar types of financial instruments and would be classified as Level 2. These amounts exclude commercial paper, unamortized swap valuation adjustments, and lease liabilities. 7. Cash and Cash Equivalents Cash equivalents include highly liquid investments with an original maturity of three months or less from the time of purchase. Cash equivalents also include amounts due from third-party financial institutions for credit and debit card transactions. These receivables typically settle in five days or less. 1.556 Cash and Cash Equivalents February 1, February 2, (millions) 2020 2019 Cash 326 $ 359 Short-term investments 1,810 769 Receivables from third-party financial institutions for credit and debit card transactions 441 428 Cash and cash equivalents - $ 2,577 $ We have access to these funds without any significant restrictions, taxes or penalties. As of February 1, 2020 and February 2, 2019, we reclassified book overdrafts of $209 million and $242 million, respectively, to Accounts Payable and $23 million and $25 million, respectively, to Accrued and Other Current Liabilities. 8. Inventory The vast majority of our inventory is accounted for under the retail inventory accounting method (RIM) using the last-in, first-out (LIFO) method. Inventory is stated at the lower of LIFO cost or market. Inventory cost includes the amount we pay to our suppliers to acquire inventory, freight costs incurred to deliver product to our distribution centers and stores, and import costs, reduced by vendor income and cash discounts. Distribution center operating costs, including compensation and benefits, are expensed in the period incurred. Inventory is also reduced for estimated losses related to shrink and markdowns. The LIFO provision is calculated based on inventory levels, markup rates, and internally measured retail price indices. Under RIM, inventory cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to the inventory retail value. RIM is an averaging method that has been widely used in the retail industry due to its practicality. The use of RIM will result in inventory being valued at the lower of cost or market because permanent markdowns are taken as a reduction of the retail value of inventory 9. Other Current Assets Other Current Assets (millions) Income tax and other receivables Vendor income receivable Prepaid expenses Other Total $ February 1. 2020 498 $ 464 154 217 1,333 $ February 2 2019 632 468 157 209 1,466 $
