Target Corporation Common Size Income Statement Total revenue Cost of sales Selling, general and administrative expenses Depreciation and amortization (exclusive of depreciation included in cost of sales) Operating income 12 Months Ended Percentages Jan. 29, 2022 Jan. 30, 2021 Jan. 28, 2023 Jan. 29, 2022 $ 106,005 74,963 19,752 2,344 8,946 Jan. 28, 2023 $ 109,120 82,229 20,658 2,385 $ 93,561 66,177 421 (382) 18,615 2,230 6,539 977 16 Jan. 30, 2021 3,848 Net interest expense 478 Net other (income) / expense (48) 3,418 8,907 5,546 Earnings before income taxes Provision for income taxes Net earnings 638 1,961 1,178 $ 2,780 $ 6,946 $ 4,368 a. Review the vertical analysis and provide the two largest expenses for the current year. Explain the trend over the three years for these two expenses and discuss how these costs affects net earnings. b. Discuss the fluctuations in interest expense. What are reasons that could cause changes in interest expense? You need to provide specific causes for the applicable company that relates specifically to the interest expense. c. Discuss the fluctuations in income tax expense. What are reasons that could cause changes in income tax expense? You need to provide specific causes for the applicable company that relates specifically to the income tax expense. d. Was the company more or less profitable when compared to the prior year? Using the specific income statement ratios or amounts, explain what caused the change in income from the prior year.
Target Corporation Common Size Income Statement Total revenue Cost of sales Selling, general and administrative expenses Depreciation and amortization (exclusive of depreciation included in cost of sales) Operating income 12 Months Ended Percentages Jan. 29, 2022 Jan. 30, 2021 Jan. 28, 2023 Jan. 29, 2022 $ 106,005 74,963 19,752 2,344 8,946 Jan. 28, 2023 $ 109,120 82,229 20,658 2,385 $ 93,561 66,177 421 (382) 18,615 2,230 6,539 977 16 Jan. 30, 2021 3,848 Net interest expense 478 Net other (income) / expense (48) 3,418 8,907 5,546 Earnings before income taxes Provision for income taxes Net earnings 638 1,961 1,178 $ 2,780 $ 6,946 $ 4,368 a. Review the vertical analysis and provide the two largest expenses for the current year. Explain the trend over the three years for these two expenses and discuss how these costs affects net earnings. b. Discuss the fluctuations in interest expense. What are reasons that could cause changes in interest expense? You need to provide specific causes for the applicable company that relates specifically to the interest expense. c. Discuss the fluctuations in income tax expense. What are reasons that could cause changes in income tax expense? You need to provide specific causes for the applicable company that relates specifically to the income tax expense. d. Was the company more or less profitable when compared to the prior year? Using the specific income statement ratios or amounts, explain what caused the change in income from the prior year.
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter4: Accounting For Retail Operations
Section: Chapter Questions
Problem 4.2MBA: Sales transactions Using transactions listed in P4-2, indicate the effects of each transaction on...
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Calculate the common size percentages and answer the questions below.
Transcribed Image Text:Target Corporation Common Size Income Statement
Total revenue
Cost of sales
Selling, general and administrative expenses
Depreciation and amortization (exclusive of depreciation included in cost of sales)
Operating income
12 Months Ended
Percentages
Jan. 29, 2022 Jan. 30, 2021 Jan. 28, 2023 Jan. 29, 2022
$ 106,005
74,963
$ 93,561
66,177
19,752
18,615
2,344
2,230
6,539
977
16
5,546
1,178
$4,368
Jan. 28, 2023
$ 109,120
82,229
20,658
2,385
3,848
478
Net interest expense
Net other (income) / expense
Earnings before income taxes
Provision for income taxes
Net earnings
a. Review the vertical analysis and provide the two largest expenses for the current year. Explain the trend over the three years for these two expenses and discuss how these costs affects net earnings.
(48)
8,946
421
3,418
638
$ 2,780
(382)
Jan. 30, 2021
8,907
1,961
$ 6,946
b. Discuss the fluctuations in interest expense. What are reasons that could cause changes in interest expense? You need to provide specific causes for the applicable company that relates specifically to the interest expense.
c. Discuss the fluctuations in income tax expense. What are reasons that could cause changes in income tax expense? You need to provide specific causes for the applicable company that relates specifically to the income tax expense.
d. Was the company more or less profitable when compared to the prior year? Using the specific income statement ratios or amounts, explain what caused the change in income from the prior year.
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