Balance-Sheet-Based Accruals Ratio

Target Corp., balance sheet computation of aggregate accruals

USD $ in millions

 
Feb 1, 2014 Feb 2, 2013 Jan 28, 2012 Jan 29, 2011 Jan 30, 2010 Jan 31, 2009
Operating Assets
Total assets 44,553  48,163  46,630  43,705  44,533  44,106 
Less: Cash and cash equivalents 692  654  600  583  583  562 
Less: Short-term investments 130  194  1,129  1,617  302 
Operating assets 43,858  47,379  45,836  41,993  42,333  43,242 
Operating Liabilities
Total liabilities 28,322  31,605  30,809  28,218  29,186  30,394 
Less: Current portion of long-term debt and other borrowings 1,160  2,994  3,786  119  1,696  1,262 
Less: Long-term debt and other borrowings, excluding current portion 12,622  14,654  13,697  15,607  15,118  17,490 
Operating liabilities 14,540  13,957  13,326  12,492  12,372  11,642 
Net operating assets1 29,318  33,422  32,510  29,501  29,961  31,600 
Balance-sheet-based aggregate accruals2 (4,104) 912  3,009  (460) (1,639)
Balance-Sheet-Based Accruals Ratio, Comparison to Industry
Target Corp.3 -13.08% 2.77% 9.70% -1.55% -5.32%
Industry, Consumer Services –% 3.32% 3.30% 9.86% 1.56%

2014 Calculations

1 Net operating assets = Operating assets – Operating liabilities
= 43,858 – 14,540 = 29,318

2 Balance-sheet-based aggregate accruals = Net operating assets 2014 – Net operating assets 2013
= 29,318 – 33,422 = -4,104

3 Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × -4,104 ÷ [(29,318 + 33,422) ÷ 2] = -13.08%

Ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, Target Corp. deteriorated earnings quality from 2013 to 2014.

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Cash-Flow-Statement-Based Accruals Ratio

Target Corp., cash flow statement computation of aggregate accruals

USD $ in millions

 
Feb 1, 2014 Feb 2, 2013 Jan 28, 2012 Jan 29, 2011 Jan 30, 2010 Jan 31, 2009
Net earnings 1,971  2,999  2,929  2,920  2,488  2,214 
Less: Cash provided by operations 6,520  5,325  5,434  5,271  5,881  4,430 
Less: Cash required for investing activities (271) (2,855) (4,180) (1,744) (1,703) (4,373)
Cash-flow-statement-based aggregate accruals (4,278) 529  1,675  (607) (1,690) 2,157 
Cash-Flow-Statement-Based Accruals Ratio, Comparison to Industry
Target Corp.1 -13.64% 1.60% 5.40% -2.04% -5.49%
Industry, Consumer Services –% 2.85% 1.88% 2.70% -0.21%

2014 Calculations

1 Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -4,278 ÷ [(29,318 + 33,422) ÷ 2] = -13.64%

Ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, Target Corp. deteriorated earnings quality from 2013 to 2014.

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