Task: Prepare a 1,750- to 2,100-word paper, formatted according to APA guidelines, that includes performance ratios based on the company's last two annual reports and data available on the company's Web site. The company I have chosen is Target.
o Compute the eight ratios listed below for two consecutive years. Discuss their significance for management and compare them to industry averages.
• Current Ratio
• Quick Ratio
• Inventory Turnover Ratio (Note: on the Dunn and Bradstreet Web site this ratio is labeled Sales to Inventory)
Introduction to Finance: Harvesting the Money Tree
Course Syllabus:
• Debt Ratio (Note: on the Dunn and Bradstreet Web site this ratio is labeled Total Liabilities to Net Worth)
• Net Profit Margin Ratio (Note: on the Dunn and Bradstreet Web site this ratio is labeled Return on Sales)
• ROI (Note: on the Dunn and Bradstreet Web site this ratio is labeled Return on Assets)
• ROE (Note: on the Dunn and Bradstreet Web site this ratio is labeled Return on Net)
• Price-to-Earnings Ratio (P/E) Ratio
o Analyze the company's working capital management. Explain why the company’s operating and cash cycles are currently optimized. If you think they are not optimized, explain why.
o Based on the company’s financial statements, list the long-term debt held by the corporation, maturity dates and yield to maturity. List the types of stock issued by the company, the stocks’ current selling price, and the 52-week average selling price.
o Compute the weighted average cost of capital (WACC) for both years and discuss your findings.
o Write a brief analysis that summarizes the data you’ve gathered throughout the weeks and evaluates how your company compares to industry averages.
o Write your recommendations on whether as an investor you should buy this company's stock and why.