Now consider the effectiveness of Target's revenue$-$generating and cost$-$containing activities and its profitability ratios. That is$,$ how effective is TGT$\text{'}$s

management in using the company's current and fixed assets to generate profits? $($Note: Round all intermediate and final calculations to two decimal

places. The values you enter should be in percentage form.$)$

Target Corporation Profitability Ratios

Operating profit margin

Net profit margin To answer these questions, focus primarily on income statement accounts and relate them selectively to either the firm's asset holdings $($total assets$)$

or its sources of financing $($such as its common equity$).$ For example:

The return on assets $($ROA$)$ ratio relates the volume of after$-$tax earnings generated to each dollar of company assets. The trend of Target's ROA

ratio, over the period of $2008$ to $2010,$ indicates that management is becoming

productive or effective in generating

dollars.

In addition, the return on equity $($ROE$)$ ratio provides shareholders with a summary value that indicates the amount of net income generated by each

dollar of stockholders' equity. The trend of Target's ROE ratios indicates that management is

in generating a growing return to

Target's shareholders.

Which of the following statements are correct? Check all that apply.

An examination of the trend of the total asset account balances further supports the behavior of the ROA values.

The trend of the Net income account suggests that Target is doing a better job in managing its operating and debt$-$financing costs.

The trend of Target's Net income account is contradictory to the observed behavior of its ROA and ROE ratios.

In contrast, the basic earnings power $($BEP$)$ ratio provides insights into the effectiveness of Target's management in generating profits using the

firm's total assets$-$before consideration of its

By excluding these expenses from the

calculation, the ratio is useful for comparing companies that employ differing tax treatments and

Which of the following statements are cA Financial Ratio Analysis of Target Corporation

A Profitability Assessment

Assume that you are an existing shareholder of Target Corporation $($TGT$),$ a retailer of "everyday essentials and fashionable, differentiated merchandise at discounted prices," and are interested in the company's historical and current financial activities and performance. Use the following financial data for Target to complete and conduct your financial ratio analysis. Then answer the questions that follow. Remember, the results of a ratio analysis often identiry issues requiring additional investigation.

$\backslash$table$[[$Target Corporation$],[$Selected Income Statement, Balance Sheet, and Related Data $^(1)],[$Income Statement,$2010,2009,2008],[$Sales$,$$$65,786,000,000,$$$63,435,000,000,$$$62,884,000,000],[$Less: Cost of goods sold,$45,725,000,000,44,062,000,000,44,157,000,000],[$Gross prolit,$20,061,000,000,19,373,000,000,18,727,000,000],[$Less: Selling, general, and administrative expenses,$13,469,000,000,13,078,000,000,12,954,000,000],[$Less: Other expenses,$860,000,000,1,521,000,000,1,609,000,000],[$Earnings before interest and taxes $($EBIT$),5,252,000,000,4,673,000,000,4,402,000,000],[$Less: Interest expense,$757,000,000,801,000,000,866,000,000],[$Earnings before taxes $($EBT$),4,495,000,000,3,872,000,000,3,536,000,000],[$Less: Taxes,$1,575,000,000,1,384,000,000,1,322,000,000],[$Net income,$$2,920,000,000,$$$2,488,000,000,$$$2,214,000,000],[$Less: Common dividends paid,$609,000,000,496,000,000,465,000,000],[$Dividends per share,$$0\mathrm{.}87,$$$0\mathrm{.}67,$$$0\mathrm{.}62],[$Balance Sheet Data$],[$Assets:$,2010,2009,2008],[$Cash and marketable securities$,$$$1,712,000,000,$$$2,200,000,000,$$$864,000,000],[$Receivables$,6,153,000,000,6,966,000,000,8,084,000,000],[$Inventory$,7,596,000,000,7,179,000,000,6,705,000,000],[$Other current assets,$1,752,000,000,2,079,000,000,1,835,000,000],[$Total current assets,$17,213,000,000,18,424,000,000,17,488,000,000],[$Net fixed assets,$25,493,000,000,25,280,000,000,25,756,000,000],[$Other long$-$term assets,$999,000,000,829,000,000,862,000,000],[$Total assets,$$43,705,000,000,$$$44,533,000,000,$$$44,106,000,000],[$Liabilities and Equity:$],[$Accounts payable,$$6,625,000,000,$$$6,511,000,000,$$$6,337,000,000],[$Accruals$,3,326,000,000,3,120,000,000,2,913,000,000],[$Other current liabilities,$119,000,000,1,696,000,000,1,262,000,000],[$Total current liabilities,$10,070,000,000,11,327,000,000,10,512,000,000],[$Long$-$term liabilities,$18,148,000,000,17,859,000,000,19,882,000,000],[$Total debt,$28,218,000,000,29,186,000,000,30,394,000,000],[$Common stock,$59,000,000,62,000,000,63,000,000],[$Additional paid$-$in capital,$3,311,000,000,2,919,000,000,2,762,000,000],[$Retained earnings,$12,117,000,000,12,366,000,000,10,887,000,000],[$Total equity,$15,487,000,000,15,347,000,000,13,712,000,000],[$Total debt and equity,$$43,705,000,000,$$$44,533,000,000,$$$44,106,000,000],[$Other Relevant Data$],[$Common shares outstanding,$704,038,218,744,644,454,752,712,464],[$Total dividends paid,$609,000,000,496,000,000,465,000,000],[$Market price per share,$$54\mathrm{.}35,$$