Acc 620 – Target: Financial Reporting Analysis
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Target: Financial Reporting AnalysisACC 620: Financial Reporting IICurrent 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 StatementExcerpt from Consolidated Income statement (January 31, 2015)[pic 1]The Source retrieved from: (Target Annual report, 2015)Target Corp.Projected Income StatementFiscal Year Ended January 31, 2016Basic net income per common share:Basic income per common share from continuing operation[1] 5.07Basic income per common share from discontinued operations .07Basic net income per common share attributable to Target: 5.14 Diluted net income per common share:Diluted income per common share from continuing operations 5.03Diluted income per common share from discontinued operations .07Diluted net income per common share attributable to Target 5.10 Weighted-average common shares outstanding: Basic[2] 662.2Diluted 667.4 Dividends declared per common share [3] 2.20Currently 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 EPSProjected Statement of Retained EarningsTarget Corp.Projected Retained Earnings StatementFiscal Year Ended January 31, 2016Retained earnings as reported [Jan 31 2015] 9,644 Add: Net Income 3, 363Less Cash dividends [4] 1,458Retained Earnings Adjusted 11,549In 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, 2016Assets:Cash and Cash equivalents [6] 6,038Short-term investments 3,008Cash and Cash Equivalents, 9,046including short-term investments Credit card Receivables, held for sale -Credit card receivables, net of allowance – Inventory 8,601Assets of discontinued operations 322Income tax and other receivables 352Vendor income receivable 379Prepaid expenses 214Pharmacy-related receivables -Deferred taxes – Other 168Other current assets 1,161 Current Assets 19,130Property and equipment, net 25,217Non-Current assets of discontinued operations 75Deferred Taxes 33