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Review the multiple-step income statements that you have completed From the annual report of Target corporation and Amazon .com for the year ended 2017 and
Review the multiple-step income statements that you have completed From the annual report of Target corporation and Amazon .com for the year ended 2017 and evaluate the information. If you had to decide which company was more successful using only the multiple-step income statement you created, which one would you be more likely to invest in and why?
Target Income Statement
| 2017 (a) | 2016 | 2015 | 2014 | 2013 | |
|---|---|---|---|---|---|
| FINANCIAL RESULTS: (in millions) | |||||
| Sales (b) | $71,879 | $69,495 | $73,785 | $72,618 | $71,279 |
| Cost of sales (c) | 51,125 | 49,145 | 52,241 | 51,506 | 50,243 |
| Gross margin | 20,754 | 20,350 | 21,544 | 21,112 | 21,036 |
| Selling, general and administrative expenses (SG&A) | 14,248 | 13,356 | 14,665 | 14,676 | 14,465 |
| Depreciation and amortization (exclusive of depreciation included on cost of sales) (c) | 2,194 | 2,025 | 1,969 | 1,901 | 1,792 |
| Gain on sale (d) | (620) | (391) | |||
| Earnings from continuing operations before interest expense and income taxes (EBIT) | 4,312 | 4,969 | 5,530 | 4,535 | 5,170 |
| Net interest expense (e) | 666 | 1,004 | 607 | 882 | 1,049 |
| Earnings from continuing operations before income taxes | 3,646 | 3,965 | 4,923 | 3,653 | 4,121 |
| Provision for income taxes (f) | 718 | 1,296 | 1,602 | 1,204 | 1,427 |
| Net earnings from continuing operations | 2,928 | 2,669 | 3,321 | 2,449 | 2,694 |
| Discontinued operations, net of tax | 6 | 68 | 42 | (4,085) | (723) |
| Net earnings / (loss) | $2,934 | $2,737 | $3,363 | $(1,636) | $1,971 |
| PER SHARE: | |||||
| BASIC EARNINGS / (LOSS) PER SHARE | |||||
| Continuing operations | $5.35 | $4.62 | $5.29 | $3.86 | $4.24 |
| Discontinued operations | 0.01 | 0.12 | 0.07 | (6.44) | (1.14) |
| Net earnings / (loss) per share | $5.36 | $4.74 | $5.35 | $(2.58) | $3.10 |
| DILUTED EARNINGS / (LOSS) PER SHARE | |||||
| Continuing operations | $5.32 | $4.58 | $5.25 | $3.83 | $4.20 |
| Discontinued operations | 0.01 | 0.12 | 0.07 | (6.38) | (1.13) |
| Net earnings / (loss) per share | $5.33 | $4.70 | $5.31 | $(2.56) | $3.07 |
| Cash dividends declared | $2.46 | $2.36 | $2.20 | $1.99 | $1.65 |
| FINANCIAL POSITION: (in millions) | |||||
| Total assets | $38,999 | $37,431 | $40,262 | $41,172 | $44,325 |
| Capital expenditures (g) | $2,533 | $1,547 | $1,438 | $1,786 | $1,886 |
| Long-term debt, including current portion (g) | $11,587 | $12,749 | $12,760 | $12,725 | $12,494 |
| Net debt (g)(h) | $10,456 | $11,639 | $9,752 | $11,205 | $12,491 |
| Shareholders' investment | $11,709 | $10,953 | $12,957 | $13,997 | $16,231 |
| SEGMENT FINANCIAL RATIOS: (i) | |||||
| Comparable sales growth (j) | 1.3% | (0.5)% | 2.1% | 1.3% | (0.4)% |
| Gross margin (% of sales) (c) | 28.9% | 29.3% | 29.2% | 29.1% | 29.5% |
| SG&A (% of sales) | 19.8% | 19.2% | 19.6% | 20.0% | 20.2% |
| EBIT margin (% of sales) | 6.0% | 7.1% | 6.9% | 6.5% | 6.8% |
| OTHER: | |||||
| Common shares outstanding (in millions) | 541.7 | 556.2 | 602.2 | 640.2 | 632.9 |
| Operating cash flow provided by continuing operations (in millions) | $6,849 | $5,329 | $5,254 | $5,157 | $7,572 |
| Sales per square foot (g)(k) | $295 | $290 | $307 | $302 | $298 |
| Retail square feet (in thousands) (g) | 239,355 | 239,502 | 239,539 | 239,963 | 240,054 |
| Square footage growth (g) | (0.1)% | % | (0.2)% | % | 0.9% |
| Total number of stores (g) | 1,822 | 1,802 | 1,792 | 1,790 | 1,793 |
| Total number of distribution centers (g) | 41 | 40 | 40 | 38 | 37 |
Amazon Income Statement
| 12 months ended | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net product sales | 160,408 | 141,915 | 118,573 | 94,665 | 79,268 | ||||||
| Net services sales | 120,114 | 90,972 | 59,293 | 41,322 | 27,738 | ||||||
| Net sales | 280,522 | 232,887 | 177,866 | 135,987 | 107,006 | ||||||
| Cost of sales | (165,536) | (139,156) | (111,934) | (88,265) | (71,651) | ||||||
| Gross profit | 114,986 | 93,731 | 65,932 | 47,722 | 35,355 | ||||||
| Fulfillment | (40,232) | (34,027) | (25,249) | (17,619) | (13,410) | ||||||
| Technology and content | (35,931) | (28,837) | (22,620) | (16,085) | (12,540) | ||||||
| Marketing | (18,878) | (13,814) | (10,069) | (7,233) | (5,254) | ||||||
| General and administrative | (5,203) | (4,336) | (3,674) | (2,432) | (1,747) | ||||||
| Other operating expense, net | (201) | (296) | (214) | (167) | (171) | ||||||
| Operating income | 14,541 | 12,421 | 4,106 | 4,186 | 2,233 | ||||||
| Interest income | 832 | 440 | 202 | 100 | 50 | ||||||
| Interest expense | (1,600) | (1,417) | (848) | (484) | (459) | ||||||
| Other income (expense), net | 203 | (183) | 346 | 90 | (256) | ||||||
| Non-operating income (expense) | (565) | (1,160) | (300) | (294) | (665) | ||||||
| Income before income taxes | 13,976 | 11,261 | 3,806 | 3,892 | 1,568 | ||||||
| Provision for income taxes | (2,374) | (1,197) | (769) | (1,425) | (950) | ||||||
| Equity-method investment activity, net of tax | (14) | 9 | (4) | (96) | (22) | ||||||
| Net income | 11,588 | 10,073 | 3,033 |
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