Question

Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended January 30, 2016, are available in the Connect. This material also is available under the Investor Relations link at the company’s website (www.target.com).

1) What amounts did Target report for the following items for the year ended January 30, 2016?

b) Income from current operations

c) Net income or net loss

d) Total assets

e) Total equity

2) What was Target’s basic earnings per share for the year ended January 30, 2016?

Why do you think Target has chosen to have its fiscal year end on January 30, as opposed to December 31?

3) Regarding Target’s audit report:

Who is Target’s auditor?

Did Target receive a “clean” (unmodified) audit opinion?

Answer 1

1. Income from current operations for 2016 is $5,530 millions.
2. Net income for 2016 is $3,363 millions.
3. Total assets for 2016 is $40,262 millions.
4. Total equity for 2016 is $12,957 millions.
5. Basic earnings per share for 2016 is as $ 5.35 (continuing operations $5.29 and discontinued operations $0.07)
6. Companies may choose to have different fiscal-year end from the calendar year-end. The main reason for selecting January 31 as year end is a large share of revenues and earnings occurs in the fourth quarter because of peak holiday sales period of November and December. As sales are high during this time, it will be difficult for preparing the financial statement and also taking year end stock. Most of the retail firm choose alternate fiscal-year end such as January 31 instead of December 31, as it will give them time to prepare financial statements after the holiday season and also giving time to take closing stock inventory details.
7. The auditor is Ernest and Young LLP and they have provided a clean audit opinion.