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Use the attached information to complete the ratio analysis.  The Ratio Analysis is for Profitability.

Use the attached information to complete the ratio analysis.  The Ratio Analysis is for Profitability.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Use the attached information to complete the ratio analysis.  The Ratio Analysis is for Profitability.

**Vertical Analysis - Balance Sheets: Target Corporation** This image presents a vertical analysis of Target Corporation's balance sheets for the fiscal years 2018 (FY 2018) and 2017 (FY 2017), highlighting the percentage breakdown and comparisons of different financial categories. **Instructions:** - Use the 2018 Annual Report for both years' figures. - Complete all greyed boxes. Ratios should be carried to two decimal places. ### FY 2018 Breakdown **Assets:** - **Cash and cash equivalents:** $1,556 (3.77%) - **Inventory:** $9,497 (22.99%) - **Other current assets:** $1,466 (3.55%) - **Total current assets:** $12,519 (30.32%) - **Property and equipment:** - **Land:** $6,064 (14.69%) - **Buildings and equipment:** $29,240 (70.84%) - **Fixtures and equipment:** $5,912 (14.32%) - **Computer hardware and software:** $2,544 (6.16%) - **Construction-in-progress:** $460 (1.12%) - **Accumulated depreciation:** $(18,687) (-45.25%) - **Net property and equipment:** $25,533 (61.84%) - **Operating lease assets:** $1,968 (4.77%) - **Other noncurrent assets:** $1,275 (3.08%) - **Total Assets:** $41,290 (100.00%) **Liabilities:** - **Current liabilities:** - **Accounts payable:** $9,761 (23.65%) - **Accrued and other current liabilities:** $4,201 (10.17%) - **Current portion of long-term debt and other borrowings:** $1,052 (2.55%) - **Total current liabilities:** $15,014 (36.37%) - **Noncurrent liabilities:** - **Long-term debt and other borrowings:** $10,223 (24.76%) - **Noncurrent operating lease liabilities:** $2,004 (4.85%) - **Deferred income taxes:** $972 (2.35%) - **Other noncurrent liabilities:** $1,780 (4.31%) - **Total noncurrent liabilities:** $14,979 (
Transcribed Image Text:**Vertical Analysis - Balance Sheets: Target Corporation** This image presents a vertical analysis of Target Corporation's balance sheets for the fiscal years 2018 (FY 2018) and 2017 (FY 2017), highlighting the percentage breakdown and comparisons of different financial categories. **Instructions:** - Use the 2018 Annual Report for both years' figures. - Complete all greyed boxes. Ratios should be carried to two decimal places. ### FY 2018 Breakdown **Assets:** - **Cash and cash equivalents:** $1,556 (3.77%) - **Inventory:** $9,497 (22.99%) - **Other current assets:** $1,466 (3.55%) - **Total current assets:** $12,519 (30.32%) - **Property and equipment:** - **Land:** $6,064 (14.69%) - **Buildings and equipment:** $29,240 (70.84%) - **Fixtures and equipment:** $5,912 (14.32%) - **Computer hardware and software:** $2,544 (6.16%) - **Construction-in-progress:** $460 (1.12%) - **Accumulated depreciation:** $(18,687) (-45.25%) - **Net property and equipment:** $25,533 (61.84%) - **Operating lease assets:** $1,968 (4.77%) - **Other noncurrent assets:** $1,275 (3.08%) - **Total Assets:** $41,290 (100.00%) **Liabilities:** - **Current liabilities:** - **Accounts payable:** $9,761 (23.65%) - **Accrued and other current liabilities:** $4,201 (10.17%) - **Current portion of long-term debt and other borrowings:** $1,052 (2.55%) - **Total current liabilities:** $15,014 (36.37%) - **Noncurrent liabilities:** - **Long-term debt and other borrowings:** $10,223 (24.76%) - **Noncurrent operating lease liabilities:** $2,004 (4.85%) - **Deferred income taxes:** $972 (2.35%) - **Other noncurrent liabilities:** $1,780 (4.31%) - **Total noncurrent liabilities:** $14,979 (
### Profitability Ratio Analysis Instructions #### **Formulas and Calculations for Profitability Ratios** - **Net Margin (Return on Sales)** - **Formula:** Net income / net sales (use sales only, do not include other revenue) - **Calculation:** To be completed. - **Asset Turnover** - **Formula:** Net sales (same as above) / average total assets - **Calculation:** To be completed. - **Return on Investment** - **Formula:** Net income / average total assets - **Calculation:** To be completed. - **Return on Equity** - **Formula:** Net income / average total stockholders' equity - **Calculation:** To be completed. - **Earnings per Share (EPS)** - **Formula:** Net earnings available for common stock / average number of shares outstanding - **Calculation:** To be completed. - **Price-Earnings Ratio** - **Formula:** Market price per share / earnings per share - **Calculation:** 71.17 and 72.95 are the market price per share to use. - **Book Value per Share (Common)** - **Formula:** Stockholders' equity - preferred stock / outstanding common shares - **Calculation:** 517.8 and 541.7 are the outstanding shares figures to use. ### Vertical Analysis - Income Statement #### Target Corporation - **Instructions:** Use the 2018 Annual Report for both years' information. Complete all greyed boxes. Ratios should be carried to two decimal places. | **Description** | **FY 2018** | **%** | **FY 2017** | **%** | |--------------------------------------------------|-----------------|--------|-------------|--------| | Sales (add both revenue figures) | $75,356 | 100.00%| $72,714 | 100.00%| | Cost of sales | $53,299 | 70.73% | $51,125 | 70.31% | | Gross margin | $22,057 | 29.27% | $21,589 | 29.69% | | Selling, general, and administrative expenses | $15,723 | 20.86% | $15,140 | 20.82% | | Depreciation and amortization
Transcribed Image Text:### Profitability Ratio Analysis Instructions #### **Formulas and Calculations for Profitability Ratios** - **Net Margin (Return on Sales)** - **Formula:** Net income / net sales (use sales only, do not include other revenue) - **Calculation:** To be completed. - **Asset Turnover** - **Formula:** Net sales (same as above) / average total assets - **Calculation:** To be completed. - **Return on Investment** - **Formula:** Net income / average total assets - **Calculation:** To be completed. - **Return on Equity** - **Formula:** Net income / average total stockholders' equity - **Calculation:** To be completed. - **Earnings per Share (EPS)** - **Formula:** Net earnings available for common stock / average number of shares outstanding - **Calculation:** To be completed. - **Price-Earnings Ratio** - **Formula:** Market price per share / earnings per share - **Calculation:** 71.17 and 72.95 are the market price per share to use. - **Book Value per Share (Common)** - **Formula:** Stockholders' equity - preferred stock / outstanding common shares - **Calculation:** 517.8 and 541.7 are the outstanding shares figures to use. ### Vertical Analysis - Income Statement #### Target Corporation - **Instructions:** Use the 2018 Annual Report for both years' information. Complete all greyed boxes. Ratios should be carried to two decimal places. | **Description** | **FY 2018** | **%** | **FY 2017** | **%** | |--------------------------------------------------|-----------------|--------|-------------|--------| | Sales (add both revenue figures) | $75,356 | 100.00%| $72,714 | 100.00%| | Cost of sales | $53,299 | 70.73% | $51,125 | 70.31% | | Gross margin | $22,057 | 29.27% | $21,589 | 29.69% | | Selling, general, and administrative expenses | $15,723 | 20.86% | $15,140 | 20.82% | | Depreciation and amortization
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