Requirements - Please note for this assignment you must use spreadsheet software (Excel, Google Sheets, etc) 1. Compute trend analyses for Sales and Net earnings / (loss). Use 2017 as the base year. What is the most notable aspect of these data? 2. Perform a vertical analysis for Target Corporation's balance sheet as of February 1, 2020 (fiscal year 2019), and February 2, 2019 (fiscal year 2018). Include only these main categories: Assets: Total current assets Property and equipment, net Noncurrent assets of discontinued operations Other noncurrent assets Total assets Liabilities and shareholders' investment: Total current liabilities Total noncurrent liabilities Total shareholders' investment Total liabilities and shareholders' investment Consolidated Statements of Operations 2018 $ 2019 77,130 $ 982 78,112 54,864 16,233 74,433 $ 923 75,356 53,299 15,723 2017 71,786 928 72,714 51,125 15,140 2,357 4,658 477 (9) 4,190 921 2,224 4,110 461 (27) 3,676 746 2,930 7 2,937 $ (millions, except per share data) Sales Other revenue Total revenue Cost of sales Selling, general and administrative expenses Depreciation and amortization (exclusive of depreciation included in cost of sales) Operating income Net interest expense Net other (income) / expense Earnings from continuing operations before income taxes Provision for income taxes Net earnings from continuing operations Discontinued operations, net of tax Net earnings Basic earnings per share Continuing operations Discontinued operations Net earnings per share Diluted earnings per share Continuing operations Discontinued operations Net earnings per share Weighted average common shares outstanding Basic Diluted Antidilutive shares Note: Per share amounts may not foot due to rounding. 2,225 4,224 653 (59) 3,630 722 2,908 6 2,914 3,269 12 $ 3,281 $ $ 6.39 $ 0.02 6.42 $ 5.54 $ 0.01 5.55 $ 5.32 0.01 5.32 $ $ 6.34 $ 0.02 5.50 $ 0.01 5.29 0.01 5.29 $ 6.36 $ 5.51 $ 546.8 510.9 515.6 528.6 533.2 550.3 4.1 Index to Financial Statements Consolidated Statements of Comprehensive Income 2019 2018 2,937 $ 2017 2,914 $ 3,281 $ (millions) Net earnings Other comprehensive (loss)/income, net of tax Pension and other benefit liabilities, net of tax Currency translation adjustment and cash flow hedges, net of tax Other comprehensive (loss)/income Comprehensive income 2 6 (65) 2 (63) 3,218 $ (52) (6) (58) 2,879 $ 8 $ 2,922 See accompanying Notes to Consolidated Financial Statements. Consolidated Statements or rinancial Position February 1 February 2, (millions, except footnotes) 2020 2019 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, $0.0833 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 Consolidated Statements of Cash Flows 2019 2018 2017 $ 2,914 3,281 $ 12 3,269 2,937 $ 7 2,930 6 2,908 2,474 132 2,604 147 178 10 29 322 2,476 112 (188) 123 208 95 505 18 140 199 (900) (299) 1,127 89 5,970 (348) (156) 1,307 7,099 18 7,117 419 6,861 74 6,935 3 5,973 (millions) Operating activities Net earnings Earnings from discontinued operations, net of tax Net earnings from continuing operations Adjustments to reconcile net earnings to cash provided by operations: Depreciation and amortization Share-based compensation expense Deferred income taxes Loss on debt extinguishment Noncash losses/ (gains) and other, net Changes in operating accounts: Inventory Other assets Accounts payable Accrued and other liabilities Cash provided by operating activitiescontinuing operations Cash provided by operating activitiesdiscontinued operations Cash provided by operations Investing activities Expenditures for property and equipment Proceeds from disposal of property and equipment Cash paid for acquisitions, net of cash assumed Other investments Cash required for investing activities Financing activities Additions to long-term debt Reductions of long-term debt Dividends paid Repurchase of stock Stock option exercises Cash required for financing activities Net (decrease) / increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Supplemental information Interest paid, net of capitalized interest Income taxes paid Leased assets obtained in exchange for new finance lease liabilities Leased assets obtained in exchange for new operating lease liabilities (3,027) 63 (3,516) 85 (2,533) 31 (518) 20 15 (3,416) (55) (2,944) (3,075) 1,739 (2,069) (1,330) (1,565) 73 (3,152) 1,021 1,556 2,577 $ (281) (1,335) (2,124) 96 (3,644) (1,087) 2,643 1,556 $ 739 (2,192) (1,338) (1,046) 108 (3,729) 131 2,512 2,643 $ $ 476 $ 373 492 $ 696 379 464 678 934 139 212 130 246 See accompanying Notes to Consolidated Financial Statements. Consolidated Statements of Shareholders' Investment TI 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 earnings 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. See accompanying Notes to Consolidated Financial Statements. Requirements - Please note for this assignment you must use spreadsheet software (Excel, Google Sheets, etc) 1. Compute trend analyses for Sales and Net earnings / (loss). Use 2017 as the base year. What is the most notable aspect of these data? 2. Perform a vertical analysis for Target Corporation's balance sheet as of February 1, 2020 (fiscal year 2019), and February 2, 2019 (fiscal year 2018). Include only these main categories: Assets: Total current assets Property and equipment, net Noncurrent assets of discontinued operations Other noncurrent assets Total assets Liabilities and shareholders' investment: Total current liabilities Total noncurrent liabilities Total shareholders' investment Total liabilities and shareholders' investment Consolidated Statements of Operations 2018 $ 2019 77,130 $ 982 78,112 54,864 16,233 74,433 $ 923 75,356 53,299 15,723 2017 71,786 928 72,714 51,125 15,140 2,357 4,658 477 (9) 4,190 921 2,224 4,110 461 (27) 3,676 746 2,930 7 2,937 $ (millions, except per share data) Sales Other revenue Total revenue Cost of sales Selling, general and administrative expenses Depreciation and amortization (exclusive of depreciation included in cost of sales) Operating income Net interest expense Net other (income) / expense Earnings from continuing operations before income taxes Provision for income taxes Net earnings from continuing operations Discontinued operations, net of tax Net earnings Basic earnings per share Continuing operations Discontinued operations Net earnings per share Diluted earnings per share Continuing operations Discontinued operations Net earnings per share Weighted average common shares outstanding Basic Diluted Antidilutive shares Note: Per share amounts may not foot due to rounding. 2,225 4,224 653 (59) 3,630 722 2,908 6 2,914 3,269 12 $ 3,281 $ $ 6.39 $ 0.02 6.42 $ 5.54 $ 0.01 5.55 $ 5.32 0.01 5.32 $ $ 6.34 $ 0.02 5.50 $ 0.01 5.29 0.01 5.29 $ 6.36 $ 5.51 $ 546.8 510.9 515.6 528.6 533.2 550.3 4.1 Index to Financial Statements Consolidated Statements of Comprehensive Income 2019 2018 2,937 $ 2017 2,914 $ 3,281 $ (millions) Net earnings Other comprehensive (loss)/income, net of tax Pension and other benefit liabilities, net of tax Currency translation adjustment and cash flow hedges, net of tax Other comprehensive (loss)/income Comprehensive income 2 6 (65) 2 (63) 3,218 $ (52) (6) (58) 2,879 $ 8 $ 2,922 See accompanying Notes to Consolidated Financial Statements. Consolidated Statements or rinancial Position February 1 February 2, (millions, except footnotes) 2020 2019 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, $0.0833 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 Consolidated Statements of Cash Flows 2019 2018 2017 $ 2,914 3,281 $ 12 3,269 2,937 $ 7 2,930 6 2,908 2,474 132 2,604 147 178 10 29 322 2,476 112 (188) 123 208 95 505 18 140 199 (900) (299) 1,127 89 5,970 (348) (156) 1,307 7,099 18 7,117 419 6,861 74 6,935 3 5,973 (millions) Operating activities Net earnings Earnings from discontinued operations, net of tax Net earnings from continuing operations Adjustments to reconcile net earnings to cash provided by operations: Depreciation and amortization Share-based compensation expense Deferred income taxes Loss on debt extinguishment Noncash losses/ (gains) and other, net Changes in operating accounts: Inventory Other assets Accounts payable Accrued and other liabilities Cash provided by operating activitiescontinuing operations Cash provided by operating activitiesdiscontinued operations Cash provided by operations Investing activities Expenditures for property and equipment Proceeds from disposal of property and equipment Cash paid for acquisitions, net of cash assumed Other investments Cash required for investing activities Financing activities Additions to long-term debt Reductions of long-term debt Dividends paid Repurchase of stock Stock option exercises Cash required for financing activities Net (decrease) / increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Supplemental information Interest paid, net of capitalized interest Income taxes paid Leased assets obtained in exchange for new finance lease liabilities Leased assets obtained in exchange for new operating lease liabilities (3,027) 63 (3,516) 85 (2,533) 31 (518) 20 15 (3,416) (55) (2,944) (3,075) 1,739 (2,069) (1,330) (1,565) 73 (3,152) 1,021 1,556 2,577 $ (281) (1,335) (2,124) 96 (3,644) (1,087) 2,643 1,556 $ 739 (2,192) (1,338) (1,046) 108 (3,729) 131 2,512 2,643 $ $ 476 $ 373 492 $ 696 379 464 678 934 139 212 130 246 See accompanying Notes to Consolidated Financial Statements. Consolidated Statements of Shareholders' Investment TI 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 earnings 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. See accompanying Notes to Consolidated Financial Statements