Stock Analysis on Net

Target Corp. (NYSE:TGT)

$19.99

Analysis of Income Taxes

Microsoft Excel

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Income Tax Expense (Benefit)

Target Corp., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017
Federal
State
International
Current
Federal
State
International
Deferred
Provision for income taxes

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Target Corp. current increased from 2020 to 2021 and from 2021 to 2022.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Target Corp. deferred decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.
Provision for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Target Corp. provision for income taxes increased from 2020 to 2021 and from 2021 to 2022.

Effective Income Tax Rate (EITR)

Target Corp., effective income tax rate (EITR) reconciliation

Microsoft Excel
Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017
Federal statutory tax rate
State income taxes, net of the federal tax benefit
International
Excess tax benefit related to share-based payments
Federal tax credits
Other
Effective tax rate, before Tax Cuts and Jobs Act
Tax Cuts and Jobs Act
Effective tax rate

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

Item Description The company
Effective tax rate, before Tax Cuts and Jobs Act Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

Components of Deferred Tax Assets and Liabilities

Target Corp., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017
Accrued and deferred compensation
Accruals and reserves not currently deductible
Self-insured benefits
Deferred occupancy income
Lease liabilities
Other
Gross deferred tax assets
Property and equipment
Leased assets
Inventory
Other
Gross deferred tax liabilities
Net deferred tax asset (liability)

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

Item Description The company
Gross deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Target Corp. gross deferred tax assets increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.
Net deferred tax asset (liability) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Target Corp. net deferred tax asset (liability) increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.

Deferred Tax Assets and Liabilities, Classification

Target Corp., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017
Deferred tax assets (included in Other noncurrent assets)
Deferred tax liabilities

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

Item Description The company
Deferred tax assets (included in Other noncurrent assets) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Target Corp. deferred tax assets (included in Other noncurrent assets) increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.
Deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Target Corp. deferred tax liabilities decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.

Adjustments to Financial Statements: Removal of Deferred Taxes

Target Corp., adjustments to financial statements

US$ in millions

Microsoft Excel
Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017
Adjustment to Total Assets
Total assets (as reported)
Less: Noncurrent deferred tax assets, net
Total assets (adjusted)
Adjustment to Total Liabilities
Total liabilities (as reported)
Less: Noncurrent deferred tax liabilities, net
Total liabilities (adjusted)
Adjustment to Shareholders’ Investment
Shareholders’ investment (as reported)
Less: Net deferred tax assets (liabilities)
Shareholders’ investment (adjusted)
Adjustment to Net Earnings
Net earnings (as reported)
Add: Deferred income tax expense (benefit)
Net earnings (adjusted)

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).


Target Corp., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Target Corp., adjusted financial ratios

Microsoft Excel
Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017
Net Profit Margin
Reported net profit margin
Adjusted net profit margin
Total Asset Turnover
Reported total asset turnover
Adjusted total asset turnover
Financial Leverage
Reported financial leverage
Adjusted financial leverage
Return on Equity (ROE)
Reported ROE
Adjusted ROE
Return on Assets (ROA)
Reported ROA
Adjusted ROA

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Target Corp. adjusted net profit margin ratio improved from 2020 to 2021 and from 2021 to 2022.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Target Corp. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Target Corp. adjusted financial leverage ratio increased from 2020 to 2021 and from 2021 to 2022.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Target Corp. adjusted ROE improved from 2020 to 2021 and from 2021 to 2022.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Target Corp. adjusted ROA improved from 2020 to 2021 and from 2021 to 2022.

Target Corp., Financial Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

Microsoft Excel
Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017
As Reported
Selected Financial Data (US$ in millions)
Net earnings
Sales
Profitability Ratio
Net profit margin1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings
Sales
Profitability Ratio
Adjusted net profit margin2

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

2022 Calculations

1 Net profit margin = 100 × Net earnings ÷ Sales
= 100 × ÷ =

2 Adjusted net profit margin = 100 × Adjusted net earnings ÷ Sales
= 100 × ÷ =

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Target Corp. adjusted net profit margin ratio improved from 2020 to 2021 and from 2021 to 2022.

Adjusted Total Asset Turnover

Microsoft Excel
Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017
As Reported
Selected Financial Data (US$ in millions)
Sales
Total assets
Activity Ratio
Total asset turnover1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Sales
Adjusted total assets
Activity Ratio
Adjusted total asset turnover2

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

2022 Calculations

1 Total asset turnover = Sales ÷ Total assets
= ÷ =

2 Adjusted total asset turnover = Sales ÷ Adjusted total assets
= ÷ =

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Target Corp. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022.

Adjusted Financial Leverage

Microsoft Excel
Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017
As Reported
Selected Financial Data (US$ in millions)
Total assets
Shareholders’ investment
Solvency Ratio
Financial leverage1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets
Adjusted shareholders’ investment
Solvency Ratio
Adjusted financial leverage2

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

2022 Calculations

1 Financial leverage = Total assets ÷ Shareholders’ investment
= ÷ =

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ investment
= ÷ =

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Target Corp. adjusted financial leverage ratio increased from 2020 to 2021 and from 2021 to 2022.

Adjusted Return on Equity (ROE)

Microsoft Excel
Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017
As Reported
Selected Financial Data (US$ in millions)
Net earnings
Shareholders’ investment
Profitability Ratio
ROE1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings
Adjusted shareholders’ investment
Profitability Ratio
Adjusted ROE2

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

2022 Calculations

1 ROE = 100 × Net earnings ÷ Shareholders’ investment
= 100 × ÷ =

2 Adjusted ROE = 100 × Adjusted net earnings ÷ Adjusted shareholders’ investment
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Target Corp. adjusted ROE improved from 2020 to 2021 and from 2021 to 2022.

Adjusted Return on Assets (ROA)

Microsoft Excel
Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017
As Reported
Selected Financial Data (US$ in millions)
Net earnings
Total assets
Profitability Ratio
ROA1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings
Adjusted total assets
Profitability Ratio
Adjusted ROA2

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

2022 Calculations

1 ROA = 100 × Net earnings ÷ Total assets
= 100 × ÷ =

2 Adjusted ROA = 100 × Adjusted net earnings ÷ Adjusted total assets
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Target Corp. adjusted ROA improved from 2020 to 2021 and from 2021 to 2022.