Target Corporation Case Study

Target Corporation

The protagonists in the case are Doug Scovanner, CFO of Target Corporation, and Capital Expenditure Committee (CEC). The issue of this case is reporting to the board of directors 10 projects that are required investments, to analyze and rank them in terms of importance of those projects. Mr. Scovanner found five of those projects to be accepted, however, another five ones made him to think and rank them.

Before starting the analysis of five projects going to be introduced to the Capital Expenditure Committee, lets take a look to the background of the Target. The company is in retail business. It is chain of stores selling quality products at lower prices. Its agenda is “Expect more. Pay less.” Its competitors are Sears, JCPenny, Wal-Mart, and Costco.

According to the article, we have income statement and balance sheet for 2004 and 2005 years.

Lets take a look at the Target’s balance sheet as for January 2004,2005, and 2006, which depicts the company’s financial status. It basically depicts assets and liabilities of the company.

Total assets of Target Company had increased since 2004 by 11.4%, from 2004 to 2005 it increased by 8.3%, which is driven by increased in the Property Plant and equipment of 12.9%. Also, in analyzing the balance sheet for Target we see that the current assets increased by 7.5% in 2004 and 3.5% in 2005.

As we see total assets in the amount of $34,995 million exceeded the total number of liabilities in the amount of $20,790 million, and it means that the company’s performance is good. Current assets of the company are also exceeding current liabilities.

As of January 28, 2006, Target’s liquid assets totaled $14,405 million, which is increased from 2004 by 11.2%. These assets consisted of cash and cash equivalents in the amount of $7,314 million and inventory in the amount of $5,838 million, meanwhile, Target’s current liabilities was only $9,588 million, and we can say that Target was in good position to pay its...