Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Two-Year-Ahead Forecasting of Financial Statement Following are the financial statements of Target Corporation from its fiscal year ended February 2, 2019. Target Corporation Consolidated Statements

Two-Year-Ahead Forecasting of Financial Statement Following are the financial statements of Target Corporation from its fiscal year ended February 2, 2019.

Target Corporation
Consolidated Statements of Financial Position
For Fiscal Years Ended ($ millions) Feb. 2, 2019 Feb. 3, 2018
Assets
Cash and cash equivalents $1,556 $2,643
Inventory 9,497 8,597
Other current assets 1,466 1,300
Total current assets 12,519 12,540
Property and equipment
Land 6,064 6,095
Buildings and improvements 29,240 28,131
Fixtures and equipment 5,912 5,623
Computer hardware and software 2,544 2,645
Construction-in-progress 460 440
Accumulated depreciation (18,687) (18,398)
Property and equipment, net 25,533 24,536
Operating lease assets 1,965 1,884
Other noncurrent assets 1,273 1,343
Total assets $41,290 $40,303
Liabilities and Shareholders' investment
Accounts payable $9,761 $8,677
Accrued and other current liabilities 4,201 4,094
Current portion of long-term debt and other borrowings 1,052 281
Total current liabilities 15,014 13,052
Long-term debt and other borrowings 10,223 11,117
Noncurrent operating lease liabilities 2,004 1,924
Deferred income taxes 972 693
Other noncurrent liabilities 1,780 1,866
Total noncurrent liabilities 14,979 15,600
Shareholders' investment
Common stock 43 45
Additional paid-in-capital 6,042 5,858
Retained earnings 6,017 6,495
Accumulated other comprehensive loss (805) (747)
Total shareholders' investment 11,297 11,651
Total liabilities and shareholders' investment $41,290 $40,303

Target Corporation
Consolidated Statements of Operations
12 Months Ended ($ millions) Feb. 2, 2019 Feb. 3, 2018 Jan. 28, 2017
Total revenue $75,356 $72,714 $70,271
Cost of sales 53,299 51,125 49,145
Selling, general and administrative expenses 15,723 15,140 14,217
Depreciation and amortization (exclusive of depreciation included in cost of sales) 2,224 2,225 2,045
Operating income 4,110 4,224 4,864
Net interest expense 461 653 991
Net other (income) expense (27) (59) (88)
Earnings from continuing operations before income taxes 3,676 3,630 3,961
Provision for income taxes 746 722 1,295
Net earnings from continuing operations 2,930 2,908 2,666
Discontinued operations, net of tax 7 6 68
Net earnings $ 2,937 $ 2,914 $ 2,734

Forecast Targets income statements for the fiscal years ended February 2020 and 2021 using the following assumptions and data.

Assumptions ($ millions)
Revenue growth 3.6%
Cost of sales as % of Total revenue 70.7%
Selling, general and administrative expenses as % of Total revenue 20.9%
Forecasted depreciation expense for year ended February 2020 $2,565
Forecasted depreciation expense for year ended February 2021 $2,778
Amortization expense $0
Net interest expense No change
Net other (income) expense No change
Discontinued operations, net of tax $0
Tax rate (as % pretax income) 20%

Instructions:

  • Round answers to the nearest whole number.
  • Do not use negative signs with any of your answers.
Target Corporation
Consolidated Statements of Operations
12 Months Ended ($ millions) Feb. 2020 Feb. 2021
Total revenue Answer

Answer

Cost of sales Answer

Answer

Selling, general and administrative expenses Answer

Answer

Depreciation and amortization (exclusive of depreciation included in cost of sales) Answer

Answer

Operating income Answer

Answer

Net interest expense Answer

Answer

Net other (income) / expense Answer

Answer

Earnings from continuing operations before income taxes Answer

Answer

Provision for income taxes Answer

Answer

Net earnings from continuing operations Answer

Answer

Discontinued operations, net of tax Answer

Answer

Net earnings Answer

Answer

Forecast Targets balance sheets for the fiscal years ended February 2020 and 2021. Combine the forecasted property and equipment accounts into one account, titled Property and equipment, net. Use the following assumptions and data.

Assumptions ($ millions)
Inventory as % Total revenue 12.6%
Other current assets as % Total revenue 1.9%
Operating lease assets as % Total revenue 2.6%
Other noncurrent assets as % Total revenue 1.7%
Accounts payable as % Total revenue 13.0%
Accrued and other current liabilities as % Total revenue 5.6%
Noncurrent operating lease liabilities No change
Deferred income taxes as % Total revenue 1.3%
Other noncurrent liabilities as % Total revenue 2.4%
Common stock No change
Additional paid-in capital No change
Accumulated other comprehensive loss No change
CAPEX/Current period total revenue 4.70%
Dividends for year ended February 2019 $1,335
Dividend payout 45.5%
Stock buybacks per year $0
Long term debt, current portion at February 2019 $1,052
Long term debt, current portion at February 2020 $1,002
Long-term debt, current portion at February 2021 $1,094

Instructions:

  • Round answers to the nearest whole number.
  • Use a negative sign with your Accumulated other comprehensive loss answers.
Target Corporation
Consolidated Statements of Financial Position
For Fiscal Years Ended ($ millions) Feb. 2020 Feb. 2021
Assets
Cash and cash equivalents Answer

Answer

Inventory Answer

Answer

Other current assets Answer

Answer

Total current assets Answer

Answer

Property and equipment Answer

Answer

Operating lease assets Answer

Answer

Other noncurrent assets Answer

Answer

Total assets Answer

Answer

Liabilities and Shareholders' investment
Accounts payable Answer

Answer

Accrued and other current liabilities Answer

Answer

Current portion of long-term debt and other borrowings Answer

Answer

Total current liabilities Answer

Answer

Long-term debt and other borrowings Answer

Answer

Noncurrent operating lease liabilities Answer

Answer

Deferred income taxes Answer

Answer

Other noncurrent liabilities Answer

Answer

Total noncurrent liabilities Answer

Answer

Shareholders' investment
Common stock Answer

Answer

Additional paid-in-capital Answer

Answer

Retained earnings Answer

Answer

Accumulated other comprehensive loss Answer

Answer

Total shareholders' investment Answer

Answer

Total liabilities and shareholders' investment Answer

Answer

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Cases An Interactive Learning Approach

Authors: Steven M Glover, Douglas F Prawitt

4th Edition

0132423502, 978-0132423502

More Books

Students also viewed these Accounting questions

Question

=+a) Is this reasoning correct? Explain.

Answered: 1 week ago

Question

Understand human resource planning in an academic setting.

Answered: 1 week ago

Question

Analyze mentoring and career planning opportunities for academics.

Answered: 1 week ago