The first blank is favorably/unfavorably, the second blank is sales/operating profitet income.

Target Corporation Selected Income Statement, Balance Sheet, and Related Data1 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 profit $20,061,000,000 $19,373,000,000 $18,727,000,000 Less: Selling, general, and 13,469,000,000 13,078,000,000 12,954,000,000 administrative expenses Less: Other expenses 860,000,000 1,521,000,000 1,609,000,000 Earnings before interest and $5,732,000,000 $4,774,000,000 $4,164,000,000 taxes (EBIT) Less: Interest expense 757,000,000 801,000,000 866,000,000 Earnings before taxes (EBT) $4,975,000,000 $3,973,000,000 $3,298,000,000 Less: Taxes 1,575,000,000 1,384,000,000 1,322,000,000 Net income $3,400,000,000 $2,589,000,000 $1,976,000,000 Less: Common dividends 609,000,000 496,000,000 465,000,000 paid Dividends per share $0.87 $0.67 $0.62 Balance Sheet Data Assets: 2010 2009 2008 Cash and marketable $1,712,000,000 $2,200,000,000 $864,000,000 securities 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 $54.35 $51.27 $31.20 dina 4. Which statement addressing Target's fixed asset turnover ratios or its component accounts is correct? The reason why the fixed asset turnover ratio increases from 2009 to 2010 is that the Sales account increases by 3.71%, while the Net fixed asset account increases by only 0.84%. Target's fixed asset turnover ratio should be computed using the total historical cost of its fixed assets, which means that the ratio should not reflect the accumulated depreciation, or age, of its fixed assets. on In general, a higher, rather than a lower, fixed asset turnover ratio will reflect management's performance. However, the practice of generating ever-greater sales dollars using the same stock of property, plant, and equipment can be taken to extreme. Which practice would increase a company's fixed asset turnover ratio to the detriment of the company's long-term viability and profitability? o A company doesn't replace worn-out plant and equipment and operates the remaining assets over additional work shifts. O A company cuts back on the downtime and maintenance and repair activities necessary to preserve the performance of the property and equipment. 5. The trend of the total asset turnover ratio indicates that Target is moderately successful in generating sales dollars using its entire holding of assets. In general, it earns $1.42 to $1.51 of for every dollar of assets owned. 6. Given these insights and information, which of the following statements are correct? Check all that apply. An inventory that turns over 8.66 times per year, such as Target's 2010 inventory, will be sold and replaced, on average, every 42.15 days. Each year during the period of 2008 to 2010, Target's inventory turned over more slowly -primarily because its percentage growth in inventory exceeded its percentage growth in sales. Target's accumulation of inventory merits additional investigation to ensure that it is not the result of obsolete, missing, or unsalable items. The fixed asset turnover ratio suggests that Target is generating $2.44 to $2.58 in sales per dollar of investment in net fixed assets. The trend of the DSO ratio merits additional investigation to determine why the company's receivables balance is declining over time. Target Corporation Selected Income Statement, Balance Sheet, and Related Data1 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 profit $20,061,000,000 $19,373,000,000 $18,727,000,000 Less: Selling, general, and 13,469,000,000 13,078,000,000 12,954,000,000 administrative expenses Less: Other expenses 860,000,000 1,521,000,000 1,609,000,000 Earnings before interest and $5,732,000,000 $4,774,000,000 $4,164,000,000 taxes (EBIT) Less: Interest expense 757,000,000 801,000,000 866,000,000 Earnings before taxes (EBT) $4,975,000,000 $3,973,000,000 $3,298,000,000 Less: Taxes 1,575,000,000 1,384,000,000 1,322,000,000 Net income $3,400,000,000 $2,589,000,000 $1,976,000,000 Less: Common dividends 609,000,000 496,000,000 465,000,000 paid Dividends per share $0.87 $0.67 $0.62 Balance Sheet Data Assets: 2010 2009 2008 Cash and marketable $1,712,000,000 $2,200,000,000 $864,000,000 securities 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 $54.35 $51.27 $31.20 dina 4. Which statement addressing Target's fixed asset turnover ratios or its component accounts is correct? The reason why the fixed asset turnover ratio increases from 2009 to 2010 is that the Sales account increases by 3.71%, while the Net fixed asset account increases by only 0.84%. Target's fixed asset turnover ratio should be computed using the total historical cost of its fixed assets, which means that the ratio should not reflect the accumulated depreciation, or age, of its fixed assets. on In general, a higher, rather than a lower, fixed asset turnover ratio will reflect management's performance. However, the practice of generating ever-greater sales dollars using the same stock of property, plant, and equipment can be taken to extreme. Which practice would increase a company's fixed asset turnover ratio to the detriment of the company's long-term viability and profitability? o A company doesn't replace worn-out plant and equipment and operates the remaining assets over additional work shifts. O A company cuts back on the downtime and maintenance and repair activities necessary to preserve the performance of the property and equipment. 5. The trend of the total asset turnover ratio indicates that Target is moderately successful in generating sales dollars using its entire holding of assets. In general, it earns $1.42 to $1.51 of for every dollar of assets owned. 6. Given these insights and information, which of the following statements are correct? Check all that apply. An inventory that turns over 8.66 times per year, such as Target's 2010 inventory, will be sold and replaced, on average, every 42.15 days. Each year during the period of 2008 to 2010, Target's inventory turned over more slowly -primarily because its percentage growth in inventory exceeded its percentage growth in sales. Target's accumulation of inventory merits additional investigation to ensure that it is not the result of obsolete, missing, or unsalable items. The fixed asset turnover ratio suggests that Target is generating $2.44 to $2.58 in sales per dollar of investment in net fixed assets. The trend of the DSO ratio merits additional investigation to determine why the company's receivables balance is declining over time