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2015 Analysis of Kohl's and Target

The information for this analysis comes from the "10K" which is the annual report submitted to

the SEC. To get the complete financial statements you want the most recent "10K" for both

Companies. You can get their by going to web site for each company and use "investor relations"

link.

You will find management discussion is in front of the audit annual report. General information

is found here. The audited footnotes come after the statements and they contain more detailed

Information on specific accounts.

You will be using 2014 Annual Reports for this Analysis. Both companies end their financial

year in early 20 1 5.

General Questions

You may answer with a single response for both companies, if the answer is the same. If the

Companies differ on a point, then answer the question separately for each company.

1. Who is the audit firm?

2. What are the fiscal (financial reporting) periods? Why might those dates be used?

3. How do the companies handle credit card sales - has there been a change for either

company?

4. What specific inventory methods are used? Explain what "RIM" means. Which firm could

have a profit advantage?

5. When is advertising expensed?

6. Vendors (firms that sell to Kohl's and Target) send them money, for what? How is it

recorded?

7. For each company, show the income tax expense (also called provision for income taxes)

versus income taxes actually paid (on cash flow statement).

Ratio Analysis

1. Calculate the following ratios for2014 and2013:

a. Current ratio

b. Current cash coverage ratio

c. Receivable turnover (in days) - if and when it applies

d. inventory turnover (in days)

e. Profit margin on sales

f. Return on assets

g. Return on common stock equity

h. Total debt to total assets

i. Book value per share

The formulas for these ratios are on page246 of your text book. Show the detailed

calculations for all ratios and comment on any major changes in the ratios.

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I 2015 Analysis of Kohl's and Target The information for this analysis comes from the "10K" which is the annual report submitted to the SEC. To get the complete financial statements you want the most recent "10K" for both Companies. You can get their by going to web site for each company and use "investor relations" link. You will find management discussion is in front of the audit annual report. General information is found here. The audited footnotes come after the statements and they contain more detailed Information on specific accounts. You will be using 2014 Annual Reports for this Analysis. Both companies end their financial year in early 20 1 5. General Questions You may answer with a single response for both companies, if the answer is the same. If the Companies differ on a point, then answer the question separately for each company. 1. Who is the audit firm? 2. What are the fiscal (financial reporting) periods? Why might those dates be used? 3. How do the companies handle credit card sales - has there been a change for either company? 4. What specific inventory methods are used? Explain what "RIM" means. Which firm could have a profit advantage? 5. When is advertising expensed? 6. Vendors (firms that sell to Kohl's and Target) send them money, for what? How is it recorded? 7. For each company, show the income tax expense (also called provision for income taxes) versus income taxes actually paid (on cash flow statement). Ratio Analysis 1. Calculate the following ratios for2014 and2013: a. Current ratio b. Current cash coverage ratio c. Receivable turnover (in days) - if and when it applies d. inventory turnover (in days) e. Profit margin on sales f. Return on assets g. Return on common stock equity h. Total debt to total assets i. Book value per share The formulas for these ratios are on page246 of your text book. Show the detailed calculations for all ratios and comment on any major changes in the ratios. 50