Analysis of Profitability Ratios
Beginner level
Profitability ratios measure the company’s ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Target Corp., profitability ratios
Based on: 10-K (filing date: 2020-03-11), 10-K (filing date: 2019-03-13), 10-K (filing date: 2018-03-14), 10-K (filing date: 2017-03-08), 10-K (filing date: 2016-03-11), 10-K (filing date: 2015-03-13).
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Target Corp.’s gross profit margin ratio deteriorated from 2018 to 2019 but then improved from 2019 to 2020 not reaching 2018 level. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Target Corp.’s operating profit margin ratio deteriorated from 2018 to 2019 but then improved from 2019 to 2020 exceeding 2018 level. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Target Corp.’s net profit margin ratio deteriorated from 2018 to 2019 but then improved from 2019 to 2020 exceeding 2018 level. |
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Target Corp.’s ROE improved from 2018 to 2019 and from 2019 to 2020. |
| ROA | A profitability ratio calculated as net income divided by total assets. | Target Corp.’s ROA deteriorated from 2018 to 2019 but then improved from 2019 to 2020 exceeding 2018 level. |
Gross Profit Margin
Target Corp., gross profit margin calculation, comparison to benchmarks
| Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | Jan 30, 2016 | Jan 31, 2015 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Gross margin | 22,266 | 21,134 | 20,754 | 20,623 | 21,788 | 21,340 | |
| Sales | 77,130 | 74,433 | 71,879 | 69,495 | 73,785 | 72,618 | |
| Profitability Ratio | |||||||
| Gross profit margin1 | 28.87% | 28.39% | 28.87% | 29.68% | 29.53% | 29.39% | |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors2 | |||||||
| Amazon.com Inc. | — | 40.99% | 40.25% | 37.07% | 35.09% | 33.04% | |
| Costco Wholesale Corp. | — | 11.02% | 11.04% | 11.33% | 11.35% | 11.09% | |
| Dollar General Corp. | 30.59% | 30.45% | 30.77% | 30.85% | 30.96% | 30.69% | |
| Home Depot Inc. | 34.09% | 34.34% | 34.05% | 34.16% | 34.19% | 34.81% | |
| Lowe’s Cos. Inc. | 31.80% | 32.12% | 34.11% | 34.55% | 34.82% | 34.79% | |
| TJX Cos. Inc. | 28.46% | 28.59% | 28.89% | 28.98% | 28.79% | 28.55% | |
| Walmart Inc. | 24.10% | 24.50% | 24.68% | 24.94% | 24.58% | 24.29% | |
Based on: 10-K (filing date: 2020-03-11), 10-K (filing date: 2019-03-13), 10-K (filing date: 2018-03-14), 10-K (filing date: 2017-03-08), 10-K (filing date: 2016-03-11), 10-K (filing date: 2015-03-13).
1 2020 Calculation
Gross profit margin = 100 × Gross margin ÷ Sales
= 100 × 22,266 ÷ 77,130 = 28.87%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Target Corp.’s gross profit margin ratio deteriorated from 2018 to 2019 but then improved from 2019 to 2020 not reaching 2018 level. |
Operating Profit Margin
Target Corp., operating profit margin calculation, comparison to benchmarks
| Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | Jan 30, 2016 | Jan 31, 2015 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Operating income | 4,658 | 4,110 | 4,312 | 4,969 | 5,530 | 4,535 | |
| Sales | 77,130 | 74,433 | 71,879 | 69,495 | 73,785 | 72,618 | |
| Profitability Ratio | |||||||
| Operating profit margin1 | 6.04% | 5.52% | 6.00% | 7.15% | 7.49% | 6.25% | |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| Amazon.com Inc. | — | 5.18% | 5.33% | 2.31% | 3.08% | 2.09% | |
| Costco Wholesale Corp. | — | 3.17% | 3.24% | 3.26% | 3.16% | 3.19% | |
| Dollar General Corp. | 8.30% | 8.26% | 8.55% | 9.39% | 9.53% | 9.36% | |
| Home Depot Inc. | 14.37% | 14.35% | 14.55% | 14.19% | 13.30% | 12.59% | |
| Lowe’s Cos. Inc. | 8.75% | 5.63% | 9.60% | 8.99% | 8.41% | 8.52% | |
| TJX Cos. Inc. | 10.59% | 10.82% | 10.84% | 11.60% | 11.97% | 12.40% | |
| Walmart Inc. | 3.96% | 4.30% | 4.12% | 4.73% | 5.04% | 5.63% | |
| Operating Profit Margin, Sector | |||||||
| General Retailers | — | 5.66% | 5.89% | 5.72% | 5.97% | 6.04% | |
| Operating Profit Margin, Industry | |||||||
| Consumer Services | — | 7.83% | 8.04% | 8.34% | 8.43% | 8.55% | |
Based on: 10-K (filing date: 2020-03-11), 10-K (filing date: 2019-03-13), 10-K (filing date: 2018-03-14), 10-K (filing date: 2017-03-08), 10-K (filing date: 2016-03-11), 10-K (filing date: 2015-03-13).
1 2020 Calculation
Operating profit margin = 100 × Operating income ÷ Sales
= 100 × 4,658 ÷ 77,130 = 6.04%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Target Corp.’s operating profit margin ratio deteriorated from 2018 to 2019 but then improved from 2019 to 2020 exceeding 2018 level. |
Net Profit Margin
Target Corp., net profit margin calculation, comparison to benchmarks
| Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | Jan 30, 2016 | Jan 31, 2015 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net earnings (loss) | 3,281 | 2,937 | 2,934 | 2,737 | 3,363 | (1,636) | |
| Sales | 77,130 | 74,433 | 71,879 | 69,495 | 73,785 | 72,618 | |
| Profitability Ratio | |||||||
| Net profit margin1 | 4.25% | 3.95% | 4.08% | 3.94% | 4.56% | -2.25% | |
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| Amazon.com Inc. | — | 4.13% | 4.33% | 1.71% | 1.74% | 0.56% | |
| Costco Wholesale Corp. | — | 2.45% | 2.26% | 2.12% | 2.02% | 2.09% | |
| Dollar General Corp. | 6.17% | 6.20% | 6.56% | 5.69% | 5.72% | 5.63% | |
| Home Depot Inc. | 10.20% | 10.28% | 8.55% | 8.41% | 7.92% | 7.63% | |
| Lowe’s Cos. Inc. | 5.93% | 3.25% | 5.02% | 4.76% | 4.31% | 4.80% | |
| TJX Cos. Inc. | 7.84% | 7.85% | 7.27% | 6.93% | 7.36% | 7.62% | |
| Walmart Inc. | 2.86% | 1.31% | 1.99% | 2.83% | 3.07% | 3.39% | |
| Net Profit Margin, Sector | |||||||
| General Retailers | — | 3.41% | 3.62% | 3.43% | 3.57% | 3.12% | |
| Net Profit Margin, Industry | |||||||
| Consumer Services | — | 5.03% | 5.07% | 6.37% | 5.14% | 4.68% | |
Based on: 10-K (filing date: 2020-03-11), 10-K (filing date: 2019-03-13), 10-K (filing date: 2018-03-14), 10-K (filing date: 2017-03-08), 10-K (filing date: 2016-03-11), 10-K (filing date: 2015-03-13).
1 2020 Calculation
Net profit margin = 100 × Net earnings (loss) ÷ Sales
= 100 × 3,281 ÷ 77,130 = 4.25%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Target Corp.’s net profit margin ratio deteriorated from 2018 to 2019 but then improved from 2019 to 2020 exceeding 2018 level. |
Return on Equity (ROE)
Target Corp., ROE calculation, comparison to benchmarks
| Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | Jan 30, 2016 | Jan 31, 2015 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net earnings (loss) | 3,281 | 2,937 | 2,934 | 2,737 | 3,363 | (1,636) | |
| Shareholders’ investment | 11,833 | 11,297 | 11,709 | 10,953 | 12,957 | 13,997 | |
| Profitability Ratio | |||||||
| ROE1 | 27.73% | 26.00% | 25.06% | 24.99% | 25.96% | -11.69% | |
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| Amazon.com Inc. | — | 18.67% | 23.13% | 10.95% | 12.29% | 4.45% | |
| Costco Wholesale Corp. | — | 24.00% | 24.49% | 24.86% | 19.46% | 22.39% | |
| Dollar General Corp. | 25.55% | 24.77% | 25.12% | 23.14% | 21.66% | 18.66% | |
| Home Depot Inc. | — | — | 593.54% | 183.64% | 110.97% | 68.06% | |
| Lowe’s Cos. Inc. | 217.09% | 63.50% | 58.69% | 48.07% | 33.26% | 27.07% | |
| TJX Cos. Inc. | 55.01% | 60.61% | 50.66% | 50.95% | 52.88% | 51.95% | |
| Walmart Inc. | 19.93% | 9.20% | 12.66% | 17.54% | 18.24% | 20.10% | |
| ROE, Sector | |||||||
| General Retailers | — | 24.63% | 25.67% | 24.80% | 24.09% | 20.20% | |
| ROE, Industry | |||||||
| Consumer Services | — | 20.83% | 21.33% | 27.27% | 21.40% | 20.06% | |
Based on: 10-K (filing date: 2020-03-11), 10-K (filing date: 2019-03-13), 10-K (filing date: 2018-03-14), 10-K (filing date: 2017-03-08), 10-K (filing date: 2016-03-11), 10-K (filing date: 2015-03-13).
1 2020 Calculation
ROE = 100 × Net earnings (loss) ÷ Shareholders’ investment
= 100 × 3,281 ÷ 11,833 = 27.73%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Target Corp.’s ROE improved from 2018 to 2019 and from 2019 to 2020. |
Return on Assets (ROA)
Target Corp., ROA calculation, comparison to benchmarks
| Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | Jan 30, 2016 | Jan 31, 2015 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net earnings (loss) | 3,281 | 2,937 | 2,934 | 2,737 | 3,363 | (1,636) | |
| Total assets | 42,779 | 41,290 | 38,999 | 37,431 | 40,262 | 41,404 | |
| Profitability Ratio | |||||||
| ROA1 | 7.67% | 7.11% | 7.52% | 7.31% | 8.35% | -3.95% | |
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| Amazon.com Inc. | — | 5.14% | 6.19% | 2.31% | 2.84% | 0.91% | |
| Costco Wholesale Corp. | — | 8.06% | 7.68% | 7.37% | 7.09% | 7.11% | |
| Dollar General Corp. | 7.50% | 12.04% | 12.30% | 10.72% | 10.35% | 9.49% | |
| Home Depot Inc. | 21.94% | 25.27% | 19.38% | 18.52% | 16.47% | 15.88% | |
| Lowe’s Cos. Inc. | 10.85% | 6.71% | 9.77% | 8.99% | 8.14% | 8.48% | |
| TJX Cos. Inc. | 13.55% | 21.36% | 18.55% | 17.84% | 19.81% | 19.91% | |
| Walmart Inc. | 6.29% | 3.04% | 4.82% | 6.86% | 7.36% | 8.03% | |
| ROA, Sector | |||||||
| General Retailers | — | 6.74% | 7.63% | 7.25% | 7.90% | 6.85% | |
| ROA, Industry | |||||||
| Consumer Services | — | 5.78% | 6.13% | 8.54% | 6.92% | 6.80% | |
Based on: 10-K (filing date: 2020-03-11), 10-K (filing date: 2019-03-13), 10-K (filing date: 2018-03-14), 10-K (filing date: 2017-03-08), 10-K (filing date: 2016-03-11), 10-K (filing date: 2015-03-13).
1 2020 Calculation
ROA = 100 × Net earnings (loss) ÷ Total assets
= 100 × 3,281 ÷ 42,779 = 7.67%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROA | A profitability ratio calculated as net income divided by total assets. | Target Corp.’s ROA deteriorated from 2018 to 2019 but then improved from 2019 to 2020 exceeding 2018 level. |