Use the attached information to complete the ratio analysis. The Ratio Analysis is for Profitability. Vertical Analysis - Balance SheetsTarget CorporationINSTRUCTIONS: Use the 2018 Annual report for both years' figures.Complete all greyed boxes. Ratios should be carried to 2 decimalplaces.FY 2018FY 2017ASSETSCash and cash equivalents12.43% $75.86% $1,5562,64321.08%8,59768.56%InventoryOther current assets9,49711.71% $30.32% $1,4661,30010.37%Total current assets12,51912,54031.11%Property and equipmentLand6,06423.75% $6,09524.84%29,240 114.52% $23.15% $9.96% $1.80% $-73.19% $61.84% $4.76% $3.08% $Buildings and equipment28,131114.65%Fixtures and equipment5,9125,62322.92%Computer hardware and software2,5442,64510.78%Construction-in-progress4604401.79%Accumulated depreciationProperty and equipment, netOperating Lease AssetsOther noncurrent assets(18,687)(18,398)-74.98%25,53360.88%24,5361,8841,9654.67%1,2731,3433.33%TOTAL ASSETS41,290100.00% $40,303 100.00%LIABILITIESAccounts payableAccrued and other current liabilitiesCurrent portion of long-term debt and other borrowingsTotal current liabilities65.01% $27.98% $7.01% $50.06% $8,67766.48%9,7614,2014,09431.37%1,0522812.15%15,01413,05245.55%Long-term debt and other borrowingsNoncurrent operating lease liabilitiesDeferred income taxes68.25% $13.38% $6.49% $11.88% $10,22311,11771.26%2,0041,92412.33%9726934.44%Other noncurrent liabilities1,7801,86611.96%Total noncurrent liabilities$414,97949.94% $15,60054.45%Total liabilities29,99372.64% $28,65271.09%SHAREHOLDERS' INVESTMENT38.00% $53.48% $53.26% $Common stock43450.39%Additional paid-in capitalRetained earningsAccumulated other comprehensive lossTotal shareholders' investment6,0425,85850.28%6,0176,49555.75%-7.13% $27.36% $(805)(747)-6.41%11,29711,65128.91%TOTAL LIABILITIES & SHAREHOLDERS' INVESTMENT$41,290100.00% $40,303100.00%%24 Use the Financial Statements provided to calculate the Ratio Analysis for Profitability.PROFITABILITYNet margin (return on sales)Formula Net income/net sales***for this use sales only (do not include other revenue)CalculationAsset turnoverFormula Net sales**same as above /average total assetsCalculationReturn on investmentFormula Net income /average total assetsCalculationReturn on equityFormula Net income/average total stockholders' equityCalculationEarnings per shareFormula Net earnings available for common stock /average number of shares outstandingCalculationPrice-earningsFormula Market price per share /earnings per shareCalculation 71.17 and 72.95 are market price per share to useBook value per share (common)Formula Stockholders' equity - preferred stock/outstanding common sharesCalculation 517.8 and 541.7 are the outstanding shares figure to useVertical Analysis - Income StatementTarget CorporationINSTRUCTIONS: Use the 2018 Annual report for both years' information. Complete all greyed boxes.Ratios should be carried to 2 de cimal places.FY 2018%FY 2017%Sales (add both revenue figures)2475,356100.00%72,714100.00%Cost of salesGross marginSelling, general, and administrative expensesDepreciation and amortizationOperating IncomeNet interest expenseNet other (income)/ expenseEarnings from continuing operations before income taxesProvision for income taxes53,29970.73%51,12570.31%$22,05729.27% $21,58929.69%15,72320.86%20.82%15,1402,2242.95%2,2253.06%$ 4,1105.45% $ 4,2245.81%4610.61% $6530.90%(27)-0.04% $(59)-0.08%$ 3,6764.88% $ 3,6304.99%74620.29% $72219.89%$ 2,930Net earnings from continuing operationsDiscontinued operations, net of taxNet earnings/(loss)3.89%2,9084.00%0.01% $60.01%$ 2,9373.90% $ 2,9144.01%

Question

Use the attached information to complete the ratio analysis.  The Ratio Analysis is for Profitability. Vertical Analysis - Balance SheetsTarget CorporationINSTRUCTIONS: Use the 2018 Annual report for both years' figures.Complete all greyed boxes. Ratios should be carried to 2 decimalplaces.FY 2018FY 2017ASSETSCash and cash equivalents12.43% $75.86% $1,5562,64321.08%8,59768.56%InventoryOther current assets9,49711.71% $30.32% $1,4661,30010.37%Total current assets12,51912,54031.11%Property and equipmentLand6,06423.75% $6,09524.84%29,240 114.52% $23.15% $9.96% $1.80% $-73.19% $61.84% $4.76% $3.08% $Buildings and equipment28,131114.65%Fixtures and equipment5,9125,62322.92%Computer hardware and software2,5442,64510.78%Construction-in-progress4604401.79%Accumulated depreciationProperty and equipment, netOperating Lease AssetsOther noncurrent assets(18,687)(18,398)-74.98%25,53360.88%24,5361,8841,9654.67%1,2731,3433.33%TOTAL ASSETS41,290100.00% $40,303 100.00%LIABILITIESAccounts payableAccrued and other current liabilitiesCurrent portion of long-term debt and other borrowingsTotal current liabilities65.01% $27.98% $7.01% $50.06% $8,67766.48%9,7614,2014,09431.37%1,0522812.15%15,01413,05245.55%Long-term debt and other borrowingsNoncurrent operating lease liabilitiesDeferred income taxes68.25% $13.38% $6.49% $11.88% $10,22311,11771.26%2,0041,92412.33%9726934.44%Other noncurrent liabilities1,7801,86611.96%Total noncurrent liabilities$414,97949.94% $15,60054.45%Total liabilities29,99372.64% $28,65271.09%SHAREHOLDERS' INVESTMENT38.00% $53.48% $53.26% $Common stock43450.39%Additional paid-in capitalRetained earningsAccumulated other comprehensive lossTotal shareholders' investment6,0425,85850.28%6,0176,49555.75%-7.13% $27.36% $(805)(747)-6.41%11,29711,65128.91%TOTAL LIABILITIES & SHAREHOLDERS' INVESTMENT$41,290100.00% $40,303100.00%%24 Use the Financial Statements provided to calculate the Ratio Analysis for Profitability.PROFITABILITYNet margin (return on sales)Formula Net income/net sales***for this use sales only (do not include other revenue)CalculationAsset turnoverFormula Net sales**same as above /average total assetsCalculationReturn on investmentFormula Net income /average total assetsCalculationReturn on equityFormula Net income/average total stockholders' equityCalculationEarnings per shareFormula Net earnings available for common stock /average number of shares outstandingCalculationPrice-earningsFormula Market price per share /earnings per shareCalculation 71.17 and 72.95 are market price per share to useBook value per share (common)Formula Stockholders' equity - preferred stock/outstanding common sharesCalculation 517.8 and 541.7 are the outstanding shares figure to useVertical Analysis - Income StatementTarget CorporationINSTRUCTIONS: Use the 2018 Annual report for both years' information. Complete all greyed boxes.Ratios should be carried to 2 de cimal places.FY 2018%FY 2017%Sales (add both revenue figures)2475,356100.00%72,714100.00%Cost of salesGross marginSelling, general, and administrative expensesDepreciation and amortizationOperating IncomeNet interest expenseNet other (income)/ expenseEarnings from continuing operations before income taxesProvision for income taxes53,29970.73%51,12570.31%$22,05729.27% $21,58929.69%15,72320.86%20.82%15,1402,2242.95%2,2253.06%$ 4,1105.45% $ 4,2245.81%4610.61% $6530.90%(27)-0.04% $(59)-0.08%$ 3,6764.88% $ 3,6304.99%74620.29% $72219.89%$ 2,930Net earnings from continuing operationsDiscontinued operations, net of taxNet earnings/(loss)3.89%2,9084.00%0.01% $60.01%$ 2,9373.90% $ 2,9144.01%

Accepted Answer

Ratio analysis is useful to measure the financial performance of the company and helpful to make…