Question

1. 2. a. $ b. C. d. e. Target's label name for its balance sheet. Current assets Long-term assets Total assets Current liabilities Long-term liabilities Total liabilities Total shareholders' equity Largest current asset Largest current liability Current ratio Debt to equity ratio Consolidated Statements of Financial Position 12,564 $ 26,435 $ 38,999 $ 13,201 14,089 27,290 $ 11,709 Inventory Accounts payable 0.95 2.33 $ $ f. 9. ليا a. b. 4. a. b.

Answer 1

Target's current ratio : current assets/current liabilities

=12564/13201=0.952

Target's debt to equity ratio : total liabilities/total shareholders equity

=27290/11709=2.33

comparison to industry average ratios :

Targets current ratio is 0.95 and  is low compared to Targets industry average current ratio is which is  1 .

this means that Target's ability to payoff its short term obligations (current liabilities) which are due within one year is not as good as Targets industry . the reason for this situation is that Targets current liabilities are high compared to its current assets whereas in Targets industry , current assets are equal to current liabilities and it means that short term obligations can be paidoff with its current assets .Targets liquidity position is littile dissapointing compared to its industry average as Target cannot meet its short-term obligations with its current assets.

Targets debt equity ratio is 2.33 and is good compared to Targets industry average debt equity ratio which is 2.5

this shows the relation between debt (contribution of creditors to the company) and shareholders equity (contribution of shareholders or owners of the company) .Target have taken less amount of debt compared to its industry . debt equity ratio indicates the financial health of the company and Target have good financial health position compared to its industry averages .so we can assume that Target's solvency position is good compared to the industry averages .