Questions:
Research Target's 2016 annual report - https://corporate.target.com/_media/TargetCorp/annualreports/2016/pdfs/Target-2016-Annual-Report.pdf
(fiscal year ended January 31, 2016). Access the financial statements and related notes. Answer the questions below.
The essay must include an introduction, body, and conclusion, and address all parts of the question. Please note that originality is the expectation - your own words with reference support. Overuse of direct quotes and copy and paste are not acceptable. Make sure to cite any references you use. At a minimum, you must cite the annual report and the textbook.
Essay Questions
Identify the inventory method used by Target. How does Target value its inventories? (See Footnote 12). Why do you think Target selected this inventory method? Explain your answer.
By using the cost of goods sold formula, you can compute net purchases, which are not reported in the Target financial statements. How much were Target's inventory purchases during the year ended January 30, 2016? Include your calculations. In addition, include a strengths and weaknesses analysis with your work. Please elaborate on why the strengths you identified are strengths. If you included any weaknesses, what would you suggest to Target for how to improve the weaknesses? Be specific.
Determine Target's inventory turnover and days' sales in inventory for the year ended January 30, 2016. (Round each ratio to one decimal place.) How do Target's inventory turnover and days' sales in inventory compare with the Kohl's Corporation as reported in the Kohl's corporation 2016 annual report - https://www.annualreports.com/HostedData/AnnualReports/PDF/NYSE_KSS_2016.pdf
for the year ended January 30, 2016? Explain and include your calculations. Do you consider this an optimal analysis for determining whether to invest in Target? Why or why not?