Acc 620 - Target: Financial Reporting Analysis

Target: Financial Reporting Analysis

ACC 620: Financial Reporting II

Current Impact of Significant Strategic Implementation

        The board of directors of Target Corporation has implemented a strategic plan of issuing additional stock to raise five million dollars for major expansions over the next five years. The following analysis will assist and determining how the issuance of capital will effect the projected consolidated statements of the upcoming fiscal year.

Projected Income Statement

Excerpt from Consolidated Income statement (January 31, 2015)

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The Source retrieved from: (Target Annual report, 2015)

Target Corp.

Projected Income Statement

Fiscal Year Ended January 31, 2016

Basic net income per common share:

Basic income per common share from continuing operation^[1]                      5.07

Basic income per common share from discontinued operations                          .07

Basic net income per common share attributable to Target:                 5.14 

Diluted net income per common share:

Diluted income per common share from continuing operations                   5.03

Diluted income per common share from discontinued operations                  .07

Diluted net income per common share attributable to Target               5.10

Weighted-average common shares outstanding:

 Basic^[2]                                                                                                         662.2

Diluted                                                                                                        667.4

 Dividends declared per common share ^[3]                                                   2.20

Currently Targets issued and outstanding shares are 602,226,517, as Jan. 31 2015, by issuing an additional 60, 024,009 at a par value of .0833 will generate the targeted 5 million dollar capital. Furthermore with reaching the targeted goal for future expansions the basic earnings per share (EPS) only decrease from year-end 2015 of 5.35, compared to the next fiscal year projected figure of 5.14. The issuance of the additional stock does not affect net income unless the board decides to issue preferred stock instead of common.  The additional common stock will be noted on the income statement for continuing operations, discontinued operations in relation to its influence on EPS

Projected Statement of Retained Earnings

Target Corp.

Projected Retained Earnings Statement

Fiscal Year Ended January 31, 2016

Retained earnings as reported [Jan 31 2015]                        9,644        

Add: Net Income                                                                   3, 363

Less Cash dividends ^[4]                                                           1,458

Retained Earnings Adjusted                                               11,549

In the light of the expected issuance of stock for five million dollars in the approaching fiscal year, based upon the projected basic income per common share decreasing insignificantly and the assumption the declared dividends remaining at $2.20 will cause the retained earnings to remain current.

Target Corp.

Projected Balance Sheet ^[5]

Fiscal Year Ended January 31, 2016

Assets:

Cash and Cash equivalents ^[6]                                                6,038

Short-term investments                                                         3,008

Cash and Cash Equivalents,                                                 9,046

including short-term investments  

Credit card Receivables, held for sale                                            -

Credit card receivables, net of allowance                                            -

Inventory                                                                        8,601

Assets of discontinued operations                                                322

Income tax and other receivables                                                  352

Vendor income receivable                                                379

Prepaid expenses                                                                214

Pharmacy-related receivables                                                -

Deferred taxes                                                                 -        

Other                                                                        168

Other current assets                                                        1,161                                                                          

Current Assets                                                                19,130

Property and equipment, net                                                25,217

Non-Current assets of discontinued operations                                75

Deferred Taxes                                                                33