Required information

Target Case (Static) [LO8-1, 8-4, 8-7]

Target Corporation prepares its financial statements according to U.S. GAAP. Targets financial statements and disclosure notes for the year ended February 3, 2018, are available here. This material is also available under the Investor Relations link at the companys website (www.target.com).

Target Case (Static) Part 1 and 3

Required: 1. Does Target use average cost, FIFO, or LIFO as its inventory cost flow assumption? 3. Calculate the gross profit ratio and the inventory turnover ratio for the fiscal year ended February 3, 2018. Compare Targets ratios with the industry averages of 24.5% and 7.1 times. Determine whether Targets ratios indicate the company is more/less profitable and sells its inventory more/less frequently compared to the industry average.

(Round "Gross profit ratio" to 1 decimal place and "Inventory turnover ratio" to 2 decimal places.)

Does Target use average cost, FIFO, or LIFO as its inventory cost flow assumption?

	Average costradio FIFOradio LIFOradio

Gross profit ratio		%
Inventory turnover ratio		times
Gross profit ratio indicates that the company is		.
Inventory turnover ratio indicates that the company sells its inventory		.