this a continuation of week 2 Target project, which I have attached, it does not have to be PP, it can be a word document as long as all the required questions are answered.

FIN515Week 3 Project: Financial Statement Analysis (continued) Continuing with your Week 2 Project, now your CEO after reviewing your earlier Week 2 PowerPoint submission has asked your team to complete an additional benchmark analysis task, before the upcoming Board Meeting. For this part of the project your team needs to do an analysis of the market and operational characteristics of your company and its financial profile. For this project, your team will need to select four companies that are direct competitors of your company. This sample selection should be based on revenue, profitability, market capitalization, market segment and product characteristics. This project is an additional benchmark data analytics project. The objective of this part of the project will be to do a comparative financial analysis of your company with the averages of the sample of four companies that will form your comparative group. The project deliverables will be another PowerPoint presentation to the CEO explaining the financial performance of your company compared to the sample of four comparable companies. The analysis should include the following deliverables: 1. An explanation of the logic of the selection of the four comparable group companies. Why were these companies selected? 2.Your team's data extraction strategy, process and methodology. 3. A financial comparison of your company to the average of the comparator group on the following financial factors. a. Profitability b. Debt Management c. Liquidity d. Asset Management e. Value Creation - based on a the 3-year trend in Free Cash Flow In order to complete this project, your team has to select which ratios you are going to use in each of the five categories given above. In addition to that, your team will have to briefly explain why you are selecting the ratios you are using in your benchmark study. Then your team will have to collect the financial data for your company and the financial data of the four competitor companies. The data can be collected from two financial data bases such as, Yahoo Finance, Lexis Nexis, Plunkett, or bizstats.com. Your team will then have to collect and calculate the averages of the four competitor companies. (Please note that no ratio calculations FIN515Week 3 Project: Financial Statement Analysis (continued) are required for each company, the ratios should be readily available on the websites noted above. You will only need to calculate the average ratios for the four companies combined.) Rubric: Second Project FIN515 Possible Points Criteria and Point Range 0-3 4-6 7-9 10-12 No referent Some ratios Ratios mostly Ratios and provided. questionable. appropriate. referent Ratios selected 12 Insufficient orInappropriate Appropriateappropriate. incorrect ratios referent selected. referent used. selected. 0-2 3-4 5-6 7-8 Ratio Extraction 8 & . . . Average Calculation 0-3 4-6 7-9 10-12 Evaluation generally correct. Minimal or incorrect May be not Evaluation No evaluation, or Evaluation 12 Evaluation, orcompletely fully evaluation not evaluation notsupported by supported by ratios are based on findings Ratios are not findings orSome original. findings. incorrect, and provided, and insufficient in referencing is minimal. referencing wasquantity. not 0-2 3-4 5-6 7-8 provided. SignificantMinor problemsWriting with andVirtually no Form 8problems with writing or presentation.. presentationerrors in presentation or format. correct with awriting few or generally exceptions.presentation. Ratios generally reflect the data source and are properly referenced. Ratios accurately reflect the data source and are properly referenced. Running head: FINANCIAL ANALYSIS Week 1 Project Target Vs. Walmart Priscilia Rosario DeVry College New York 1 FINANCIAL ANALYSIS 2 Financial Analysis, Target Corporation and Walmart Stores Incorporated Introduction The objective of this research is to compare the performance of the two corporations; Target Corporation and Walmart Stores Incorporated. The two companies are competitors in the US retail sector. In the analysis, profitability will be used as a metric to compare the financial performance. Target Corporation which is based in Minnesota has a total of one thousand eight hundred stores. It is ranked second behind Walmart Stores Incorporated which is the largest retail stores in the US with a total of eleven thousand six hundred and ninety-five stores. Walmart has its headquarters in Arkansas and both companies are public corporations trading in The New York Stock Exchange. Net Profit Margin Walmart incorporated posted US$478.614 million in Net sales for the year ended 2016. The consolidated Net income for the same year was US$15.080 million. The Net profit margin which is obtained by dividing the two variables taken as a percentage was 3.15%. Similarly, the net sales at Target Corporation were US$69.495 million and the net income for 2016 was US$2.737 million. The Net profit margin; US$2.737 million divided by US$69.495 million was 3.94%. A comparison of the two corporations shows that much as Walmart had a higher amount of sales, Target Corporation had the highest net profit margin. This means that the company is more profitable and efficiency. Gross Profit Margin Gross profit is the total revenue less the cost of goods sold. Walmart had net sales of US$478.614 million and the cost of goods sold was US$360.984 million. The gross profit attributed to the year 2016 was 117.63 million. The gross profit margin taken as a percentage of FINANCIAL ANALYSIS 3 sales was 24.6%. Target Corporation had US$48.872 million in the cost of sales and US$69.495 million in total sales revenue. The gross profit in 2016 at Target was US$20.623 million. This results in a gross profit margin of 29.67%. Again, Target has a higher gross profit margin as compared to Walmart which shows a higher profitability between the two. Operating Profit Margin An operating profit is the gross profit net of all the operating expenses. It is the earnings before interest and tax. Operating profit margin is calculated as a percentage of the net sales. The gross profit at Walmart Stores Incorporated was US$117.63 million and the total operating expenses were US$97.041 million. The operating profit margin as a percentage of sales was 20.28 %. At Target Corporation, the earnings before interest and tax were US$4.969 million and sales in the same period were US$69.495 million. The operating profit margin for the period was 7.15%. Walmart had a higher operating profit margin compared to Target. Return on Assets The return on asset is a profitability ratio which shows how well the company is using its asset base to generate a profit. The ratio is obtained by taking the net profit divided by the total company asset (Rich & Jones, 2017). Walmart as of the year ended 2016 had US$199.581 million in total assets and posted a net profit of US$15.080 million. The return to the asset for the year was 0.08. At Target Incorporated, the company had US$37.431 million in assets for the same year and US$2.737 million. The return on assets for the period was 0.073. The profitability ratio shows more efficiency in Walmart as compared to Target Corporation. Return on Equity FINANCIAL ANALYSIS 4 The Return on Equity, same as the return on asset show how well the company is using shareholder's funds to generate profits. The ratio is obtained by taking the net assets divided by the total stakeholder's equity (Mayes & Shank, 2017, p.84). The total shareholder's equity investment as Walmart was US$83.611 million. Given that the net income for the same period was US$15.080 million, the return on the asset on the period was 0.18. Similarly, the shareholder's equity at Target as for the year ended 2016 was US$10.953 million. With a net profit of US$2.737 million, the return on equity for the period was 0.25. Using the two ratios, Target has a higher profitability rate based on the ratio. Debt-To-Net Worth Ratio Debt-to-worth ratio is a financial leverage indicator of a company. It shows the level of which the assets of the company cover the liabilities. The ratio is obtained by dividing the total liabilities by the total assets net the total liabilities. The denominator is the value of the shareholder's equity. The total liabilities at Walmart for the financial year 2016 was US$115.970. The shareholders' equity value in the same period was US$83.611 million. The Debt-to-worth ratio for the period was 1.39. At Target Incorporated, the company had liabilities of US$26.478 million and the equity value of US$10.953 million, giving a debt to net worth ratio of 2.42. Asset Turnover Ratio The asset turnover ratio shows a relation between the assets and the revenue generated by a company. The average of the assets at the beginning of the year and at the end of the year forms the denominator in calculating the ratio (Warren, Reeve & Duchac, 2015, p.480). For the year 2016, Walmart had a sales turnover of US$478.614 million. The total assets at the beginning of the financial year 2016 were US$199.581 million and US$203.490 million respectively. The average total assets were 201.5355 million. The asset turnover ratio, therefore, is 2.37. At target FINANCIAL ANALYSIS 5 incorporated, the turnover was US$69.495 million and the average total assets were US$38.8465 million. The asset turnover ratio based on the figures is 1.79. Conclusion Walmart, of the two organization, has a bigger asset base compared to Target. The company had net sales of US$478.614 million while Target Corporation registered US$69.495 million in net sales. Based on the assets turnover ratio, Walmart was better placed than Target which indicates more efficiency based on the ratio. Target had more debt in its capital structure with the debt-to worth ratio of 2.42 compared to Walmart whose ratio is at 1.39. In the net profit margin analysis, Target had 3.94% ahead of Walmart which had its margin at 3.15%. This is an indication of more profitability prospects at Target despite a smaller asset base. References FINANCIAL ANALYSIS Mayes, T. R., & Shank, T. M. (2017). Financial Analysis with Microsoft Excel 2016, 8E. Cengage Learning. Rich, J. & Jones, J. (2017). Cornerstones of Financial and Managerial Accounting. Cengage Learning. The Annual Report, (2016). Target Corporation. Retrieved from: http://www.annualreports.com/HostedData/AnnualReports/PDF/NYSE_TGT_2016.pdf The Annual Report, (2016). Walmart Stores Incorporated. Retrieved from: http://s2.q4cdn.com/056532643/files/doc_financials/2016/annual/2016-Annual-ReportPDF.pdf Warren, C. S., Reeve, J. M., Duchac, J. (2015). Accounting. Cengage Learning. 6