Target Corp. (NYSE:TGT)

The financial ratios exhibit several distinct patterns over the analyzed periods, highlighting changes in leverage, capital structure, and debt servicing capacity.

Debt to Equity

The debt to equity ratio has experienced fluctuations, starting at 1.12 in May 2019, decreasing below 1.0 during late 2019 and early 2021, indicating a relatively lower reliance on debt compared to equity. Subsequently, it rose to peak levels around 1.49 in late 2022, suggesting increased leverage, before steadily declining again to approximately 1.04 by May 2025. The pattern indicates cyclical adjustments in the company's capital structure, with a general trend towards moderate leverage in the most recent periods.

Debt to Equity (including operating lease liability)

This adjusted ratio follows a similar but consistently higher pattern compared to the standard debt to equity, reflecting the inclusion of operating lease liabilities as debt. It starts at 1.3 and peaks around 1.73 in October 2022 before tapering off to nearly 1.27 by May 2025. The spread between the two ratios implies significant lease obligations impacting financial leverage.

Debt to Capital

The debt to capital ratio remains in a relatively narrow range, starting around 0.53 and showing a modest increase to a peak of 0.60 in late 2022, followed by a slight decline to approximately 0.51 by the end of the period. This suggests the company maintained a balanced mix of debt and equity financing with some cautious increases in debt financing over time.

Debt to Capital (including operating lease liability)

Including lease liabilities, this ratio is consistently higher than the basic measure by approximately 0.03 to 0.05 points. It rises from 0.57 to a peak near 0.63 in late 2022 and then slightly declines to 0.56 in May 2025, reinforcing the significance of operating lease obligations on overall capital structure.

Debt to Assets

The proportion of debt relative to total assets fluctuates mildly between 0.25 and 0.32 through the period, peaking around mid-2020 and late 2022. The relative stability here indicates that while leverage ratios shifted, total assets and debt grew somewhat in tandem.

Debt to Assets (including operating lease liability)

The inclusion of operating lease liabilities again elevates this ratio consistently by about 0.05 points. Fluctuations follow a similar pattern to the basic measure, with peaks in mid-2020 and late 2022, slightly decreasing towards May 2025.

Financial Leverage

This ratio illustrates the overall extent of reliance on debt funding and shows an increasing trend from 3.65 in May 2019 to a peak above 5.0 in late 2022, followed by a decline to approximately 3.76 in May 2025. This suggests rising leverage during the period from 2020 to 2022, then a notable reduction in the most recent quarters.

Interest Coverage

Data begins from November 2019, where the interest coverage ratio starts high at 9.78, with a dip to 5.92 in October 2020, indicating tighter earnings coverage of interest expenses. Subsequently, the ratio improves significantly, achieving very strong coverage over 20 in late 2021, before gradually moderating to values around 13.8-14 by mid-2025. This pattern indicates an improvement in earnings before interest and taxes relative to interest expenses, suggesting enhanced capacity to service debt despite increased leverage ratios observed.

In summary, the company’s leverage ratios exhibit cyclical increases, particularly in the period from late 2020 to late 2022, with elevated financial leverage and debt levels including operating leases. However, leverage appears to moderate in the most recent quarters. Interest coverage has generally improved, indicating stronger operational performance or more efficient debt servicing even as leverage fluctuated. The persistent difference between metrics including operating lease liabilities and those excluding them highlights the impact of lease obligations on the capital structure and risk profile.

The analysis of the quarterly financial data reveals notable trends in total debt, shareholders’ investment, and the debt to equity ratio over the examined periods.

Total Debt

Total debt exhibited fluctuations throughout the timeline. Initially, there was a decline from approximately 12,413 million US dollars in May 2019 to 11,499 million US dollars by February 2020. This was followed by a significant increase reaching a peak near 16,444 million US dollars in October 2022. After this peak, total debt slightly decreased and stabilized, with values hovering around 15,000 to 16,000 million US dollars through May 2025.

Shareholders’ Investment

Shareholders’ investment presented an overall growth trend, albeit with some volatility. Starting at about 11,117 million US dollars in May 2019, it increased to a peak of nearly 14,959 million US dollars in May 2021. Subsequently, there was a period of decline, bottoming out near 10,592 million US dollars around July 2022. From that point onward, the investment amounts gradually recovered and climbed consistently, reaching approximately 14,947 million US dollars by May 2025.

Debt to Equity Ratio

The debt to equity ratio showed variable behavior across the time frame. It started above 1.1 in early 2019, decreased to below 0.9 by early 2021, indicating a relatively stronger equity position compared to debt at that time. Following this period, the ratio increased steadily and peaked near 1.49 in October 2022, reflecting a heightened reliance on debt. After this peak, the ratio slowly declined, stabilizing around 1.04 by May 2025. This pattern suggests periods of increased leverage followed by a gradual reduction in debt relative to equity.

In summary, the data indicates that total debt and shareholders’ investment have experienced significant changes, with total debt peaking and then stabilizing, and shareholders’ investment showing a recovery after a notable drop. The debt to equity ratio mirrors these movements, revealing fluctuations in leverage with a recent trend towards deleveraging.

Total Debt (including operating lease liability)

The total debt exhibits variability over the observed periods. Initially, there is a decline from 14,477 million USD in May 2019 to 13,629 million USD by August 2019, followed by a moderate increase through early 2020. A notable rise occurs from 13,774 million USD in February 2020 to 16,490 million USD by May 2020, coinciding with the early phases of the COVID-19 pandemic. Afterwards, the debt fluctuates between approximately 14,800 million USD and 19,000 million USD through 2021 to 2024, peaking at 19,493 million USD in August 2024 before a slight decrease towards mid-2025. This pattern suggests active management of debt levels, potentially in response to operational or economic conditions.

Shareholders’ Investment

Shareholders’ investment follows a generally upward trajectory with some periods of decline. Starting at 11,117 million USD in May 2019, it rises to a peak of around 14,959 million USD by May 2021. Subsequently, a decline is observed to 10,592 million USD in July 2022, indicating a contraction in equity or retained earnings during this period. From mid-2022 onward, equity shows a recovery trend, increasing steadily to 14,947 million USD by May 2025. The fluctuations may reflect changes in net income, dividends, or stock issuance and repurchases impacting equity.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio demonstrates significant variability, reflecting shifts in the relative proportions of debt and equity financing. It decreased from 1.30 in May 2019 to a low of 1.00 around May 2021, indicating a period where equity increased relative to debt or debt was reduced. Following May 2021, the ratio rises sharply to a maximum of 1.73 in October 2022, suggesting increased leverage during that timeframe. Thereafter, the ratio trends downward toward 1.27 by May 2025, implying deleveraging or equity regeneration. This ratio's fluctuations are consistent with the observed movements in debt and shareholders’ investment.

Overall Insights

The data reveal a period of increased indebtedness beginning in early 2020, peaking in late 2022, accompanied by a concurrent decline in equity, resulting in a higher debt to equity ratio. This may be attributed to external economic factors influencing financing decisions. From late 2022 to mid-2025, the company appears to have taken steps to strengthen its equity base and reduce relative leverage, which could improve financial stability. The debt management and equity trends indicate a dynamic capital structure responsive to changing financial conditions.

The analysis of the provided financial data reveals several notable trends in the company's debt and capital structure over the observed periods.

Total Debt

Total debt fluctuates moderately throughout the periods, starting at 12,413 million USD in May 2019 and demonstrating some variability with a general upward trajectory until it peaks around October 2022 at 16,444 million USD. After this peak, total debt slightly declines and then stabilizes near the 15,000 to 16,000 million USD range by May 2025. The debt levels show intermittent increases and decreases but the longer-term trend suggests an overall modest increase in total debt over the five-year span.

Total Capital

Total capital remains relatively stable with slight fluctuations, beginning at 23,530 million USD in May 2019 and increasing to near 30,420 million USD by May 2025. The capital exhibits periods of growth and contraction but maintains a generally upward movement, indicative of consistent capital base growth over time. This increase in total capital may suggest either retained earnings accumulation or additional equity issuance, or a combination of both.

Debt to Capital Ratio

The debt to capital ratio illustrates a somewhat cyclical pattern with values oscillating between approximately 0.46 and 0.60. Initially, the ratio drops from 0.53 in May 2019 to a low of 0.46 in May 2021, indicating a relative reduction in debt compared to overall capital during this period. Following this, there is an upward trend reaching a peak ratio of 0.60 around October 2022, after which it decreases gradually to about 0.51 by May 2025. This pattern indicates that the company's leverage has undergone phases of both increase and decrease, with leverage highest in late 2022 and subsequently decreasing, suggesting active management of the capital structure or changes in market conditions affecting debt levels.

In summary, the data reflects a company that has slightly increased both its debt and capital over the analyzed timeframe. The debt to capital ratio's fluctuations emphasize periodic adjustments in leverage, with a peak in late 2022 followed by a reduction, implying a cautious approach to debt management post-peak leverage. Overall, the financial position in terms of capital structure appears stable with controlled leverage levels.

Total Debt (including operating lease liability)

The total debt fluctuated over the observed periods, starting at 14,477 million USD in May 2019 and showing a general upward trend with some interim declines. From mid-2019 through early 2020, debt levels were relatively stable around 13,600 to 14,000 million USD. Beginning May 2020, debt increased noticeably, peaking in October 2022 at 19,034 million USD. Following this peak, debt levels showed minor variations but remained elevated, fluctuating between approximately 18,000 and 19,500 million USD through May 2025, ending slightly lower at around 19,037 million USD.

Total Capital (including operating lease liability)

Total capital showed an increasing trend overall, beginning at 25,594 million USD in May 2019 and rising steadily over the observed periods. There were some fluctuations, most notably a slight dip from early 2022 to mid-2022, with capital dropping from around 29,000 million USD to approximately 27,823 million USD. After this period, total capital resumed its increase, reaching a peak of 34,188 million USD by February 2025 before a small decline to 33,984 million USD in May 2025.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio exhibited some variability but remained mostly within a narrow range. Initially, the ratio declined from 0.57 in May 2019 to a low of 0.50 by May 2021, suggesting an improved capital structure with relatively less debt. After mid-2021, the ratio increased, reaching a peak of 0.63 in late 2022 and early 2023, indicating higher leverage during that timeframe. In the latest periods, the ratio slightly decreased to approximately 0.56 by May 2025, reflecting some deleveraging but still higher than the lowest observed values. Overall, the ratio indicates moderate leverage with periods of both increasing and decreasing debt proportions relative to total capital.

Summary of Trends

The financial data reveal an overall increase in both total debt and total capital over the five-year period. Debt levels surged notably starting in mid-2020, possibly in response to external conditions or strategic financing decisions, culminating in a peak in late 2022. Total capital generally grew at a steadier pace, suggesting expansion or investment activities. The debt to capital ratio’s fluctuations indicate varying leverage management, with a period of deleveraging through mid-2021 followed by increased leverage until early 2023, then a modest reduction in the debt proportion thereafter. These patterns suggest a dynamic balance between financing sources, reflecting strategic shifts in capital structure management.

The analysis of the financial data reveals several notable trends concerning the company's debt, assets, and debt-to-assets ratio over the examined periods.

Total Debt

Total debt exhibited fluctuations throughout the periods. Initially, debt decreased slightly from 12,413 million USD in May 2019 to around 11,518 million USD by August 2019, followed by relative stability with minor increases and decreases through early 2021. There was a significant rise beginning in May 2020, peaking at 16,444 million USD in October 2022. After this peak, total debt showed a generally declining pattern, reducing to approximately 15,473 million USD by May 2025.

Total Assets

Total assets generally trended upward with some volatility. Starting at 40,619 million USD in May 2019, total assets increased to a peak of 56,229 million USD in October 2023. This upward trend was punctuated by periods of slight decline but overall demonstrated growth through the majority of the timeframe. Notable decreases in assets were observed after late 2021 into early 2022 and again after October 2023 through May 2025, but the total assets remained significantly higher than the starting level.

Debt to Assets Ratio

This ratio reflected the relationship between total debt and total assets, fluctuating in a relatively narrow range from 0.23 to 0.32. The lowest ratio occurred near October 2021 at 0.23, indicating a period when the company’s assets were high relative to its debt. Conversely, the ratio reached highs around May 2020 and subsequent years reaching approximately 0.31-0.32, suggesting increased leverage. The ratio decreased slightly again toward the latter periods, stabilizing close to 0.28 by May 2025, indicative of moderate leverage levels compared to assets.

Overall, the data suggests the company managed an upward trajectory in asset accumulation over time, with debt levels increasing until late 2022 followed by a gradual decline. The debt-to-assets ratio remained moderately stable, reflecting consistent management of leverage despite the fluctuations in debt and asset values.

The financial data reveals several key trends in the company's debt and asset structure over the observed periods.

Total Debt (including operating lease liability)

Total debt showed moderate fluctuations over time, initially declining from $14,477 million in May 2019 to $13,629 million in August 2019, then rising again to a peak of $19,493 million in August 2024. Following this peak, there is a slight reduction to $19,037 million by May 2025. Notably, the debt levels increased markedly around mid-2020, reflecting a significant rise in obligations during that period.

Total Assets

Total assets demonstrated an overall upward trend with some volatility. Beginning at $40,619 million in May 2019, assets increased steadily to a high of approximately $58,531 million in November 2024, before a modest decline to $56,185 million in May 2025. The asset base expanded notably during late 2021 through late 2024, indicating possible investments or acquisitions contributing to asset growth.

Debt to Assets Ratio (including operating lease liability)

The debt-to-assets ratio fluctuated in a narrow range between 0.28 and 0.37 across the periods, suggesting stable leverage relative to asset size. There was a decrease from 0.36 in May 2019 to around 0.29 by late 2020 and early 2021, indicating improved asset coverage relative to debt. However, from mid-2021 onward, the ratio climbed again to approximately 0.35, reflecting increased relative debt levels. Despite this uptick, the ratio remained below the initial level observed in early 2019, indicating maintained financial leverage within a controlled range.

Overall, the data indicates that the company managed to increase its asset base significantly while maintaining relatively consistent leverage ratios. The fluctuations in total debt signal strategic adjustments in financing, possibly linked to changing operational needs or market conditions. The steady debt-to-assets ratio suggests cautious management of financial risk despite asset growth and debt increases.

Total Assets

The total assets exhibit a fluctuating trend with periods of both growth and decline over the observed quarters. Starting around 40,619 million USD in early May 2019, assets generally increased reaching a peak near 56,229 million USD by October 2023. Despite this upward trend, intermittent decreases are observed, for instance in April 2022 and again in April and May 2024, indicating some volatility in asset accumulation or valuation.

Shareholders’ Investment

Shareholders' investment shows a broadly increasing pattern over the periods, starting at 11,117 million USD in May 2019 and growing to 14,947 million USD by May 2025. Although fluctuations occur, such as declines in late 2021 and mid-2022, the general trajectory is upward, suggesting improvement in net equity positions and potentially favorable retained earnings or capital infusion over time.

Financial Leverage

The financial leverage ratio reveals notable variability, ranging from a low of approximately 3.37 to a high of about 5.05 within the timeframe. Initially, leverage is relatively high, but it declines around mid-2021 before rising sharply and peaking in late 2022 and early 2023. Following this peak, the ratio decreases steadily through to mid-2025. This pattern indicates phases of increased debt use relative to equity, followed by deleveraging or equity growth effects, reflecting changes in capital structure management or borrowing strategies.

Earnings Before Interest and Tax (EBIT) Trend

The EBIT values display significant volatility over the examined periods. Initially, EBIT rose from 1147 million USD in May 2019 to a peak of 1337 million USD in August 2019, but then dropped sharply to 1014 million USD by November 2019. A marked decline occurred in May 2020, with EBIT reaching a low of 446 million USD, potentially reflecting external adverse factors during that time. Subsequently, EBIT recovered strongly, hitting a high of 2717 million USD in May 2021. Post this peak, a downward trend is observed with intermittent fluctuations, including a significant decrease to 329 million USD in July 2022. Recent quarters show some recovery and stabilization around the 1300 to 1900 million USD range, ending with a moderate increase to 1498 million USD in May 2025.

Net Interest Expense Trend

Net interest expense exhibited relatively stable values in the early periods, generally ranging between 104 and 126 million USD. An exceptional spike occurred in October 2020 when interest expense surged abruptly to 632 million USD, suggesting a possible one-time financial event or reclassification. Following this peak, expenses normalized back to the previous range and remained steady, mostly fluctuating between 90 and 147 million USD in the subsequent quarters, implying controlled interest-related costs after the anomaly.

Interest Coverage Ratio Analysis

The interest coverage ratio presumably measured as EBIT divided by net interest expense, reveals a pattern consistent with EBIT and interest expense movements. Early periods lack data; starting from the earliest available (August 2019), the ratio was healthy, ranging from about 9 to 10. A notable improvement occurs around early 2021, reaching exceptional highs exceeding 20, indicating robust earnings capacity relative to interest obligations. Following this peak, the ratio gradually declines but remains above 7, demonstrating reasonable ability to cover interest expenses despite the EBIT volatility. The ratio stabilizes in the mid to high teens region in the final reported periods, reflecting steady financial leverage management and good operational earning power relative to debt costs.

Overall Financial Implications

The data indicates the company experienced significant EBIT variation, likely influenced by internal operational factors or external economic conditions, with a recovery phase noticeable following the substantial low in mid-2020. The transient surge in net interest expense in late 2020 stands out as an irregular event. Throughout the periods, the interest coverage ratio suggests that, despite fluctuations in earnings and interest expenses, the company generally maintained adequate earnings to meet interest obligations, reflecting sound financial resilience and risk management in servicing debt.