Target comapny - Research Paper Example

Target Corporation Target Corporation Target Corporation is an American retail organization having 24 office locations in almost 17 countries. It is considered to be the second largest retailing company, following Walmart. Since the company operates within the retailing industry, the only type of inventory in which it deals is finished goods. According to Target Corp’s 2011 Annual Report, the company’s inventory turnover ratio was 6.2 times (47,860/ (7,918+7,596 ÷ 2) equaling approximately 59 days.

Target Corporation has kept a steady profit figure, which has showed a slight increase when comparing the profits generated in 2011 ($2,929 million) to that of the year 2010 ($2,920 million). This when compared to other competitors of Target Corp, shows that the company has performed good considering the intense competition within the retail industry from the likes of giants like Walmart. Walmart reported a profit of $15,355 million in 2011, Costco reported $1,462 million in 2011 while Best Buy Co reported 1,277 million in year ending 2011.

Target Corporation tends to operate efficiently within the retail industry. The company, like many of its adversaries, values its inventory on the basis of Retail Inventory Method. Under this method, the inventory is measured and reported at the Last in First Out (LIFO) method whereby a cost-to-retail ratio is applied to inventory grouping’s ending value. The inventory is further reported at the lower of the LIFO cost or the market value.Target Corporation has gradually increased its revenue with the years passing by.

The reported revenue in 2011 was 69,865 million – which was 3.5% more than the previous year revenue. The year 2011 also showed Target Corporation reporting its highest EBIT and Net earnings in the last five years, $5,322 million & $2,929 million respectively.ReferencesAnnual Report. (2011). Target Corporation. Available at: https://corporate.target.com/annual-reports/2011/images/company/annual_report_2011/documents/Target_2011_Annual_Report.pdf