Financial Perspective The financial perspective for Target can be broken down into three main categories. First, how efficient is the company, second, how profitable is the company, and finally, what is the company’s debt load. Below are two tables that I created to illustrate Target’s financial strengths and weaknesses that will be used to support my analysis. The first table is a Buffet and DuPont analysis that was summarized using key statistics found on Rueters.com. The second table illustrates Target’s debt obligation and its earnings to forecast the expected rate of return (profitability). The data for the second table was found on Morningstar.com.
Table 1
Table 2 Basic Valuation of Target | 1. Vigilant management | 2. Stable and understandable | 3. Undervalued | | D/E | CR | | | EPS | BVPS | DPS | LOGEST growth rate | | 6.38% | | 2003-09 | 0.92 | 1.56 | | 2003 | 2.01 | 0 | 0.26 | IGR/SGR calculation | | | | 2004-09 | 0.69 | 1.69 | | 2004 | 3.51 | 14.55 | 0.3 | | ROA | 5.03% | | 2005-09 | 0.64 | 1.5 | | 2005 | 2.71 | 16.16 | 0.36 | | ROE | 14.84% | | 2006-09 | 0.55 | 1.32 | | 2006 | 3.21 | 18.2 | 0.44 | Capacity utilization | | 1 | | 2007-09 | 0.99 | 1.6 | | 2007 | 3.33 | 18.42 | 0.52 | | RR | 0.595 | | 2008-09 | 1.28 | 1.66 | | 2008 | 2.86 | 18.22 | 0.6 | | L0*/A0 | 0.268 | | 2009-09 | 0.99 | 1.63 | | 2009 | 3.3 | 20.61 | 0.66 | | IGR | 4.26% | | 2010-09 | 1.01 | 1.71 | | 2010 | 4 | 22 | 0.84 | | SGR | 13.72% | | 2011-09 | 0.85 | 1.15 | | 2011 | 4.28 | 23.64 | 1.1 | Intrinsic value calculation | | | 2012-09 | 0.89 | 1.17 | | 2012 | 4.52 | 25.44 | 1.32 | Ten year Treasury | Rf | 2.63% | | Latest Qtr | 0.78 | 0.9 | | TTM | 3.73 | 25.56 | 1.51 | Growth rate | g | 4.26% | 6.38% | | | | | | | | | Discount rate | i | 2.63% | | Average | |