Financial Analysis: Target Corporation

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Profitability
According to Target (NYSE: TGT) GAAP earnings per share were $(2.56) and earnings per share from continuing operations were $4.27, sales grew 1.3 percent, Digital sales growth more than 30% and contributed 0.7 percentage points to 2014 sales growth. 1. Target 2014 Annual Report 2014 2013 2012 (a) 2011 2010 2009
2. FINANCIAL RESULTS: (in millions)
3. Sales $ 72,618 $ 71,279 $ 71,960 $ 68,466 $ 65,786 $ 63,435
4. Credit card revenues — — 1,341 1,399 1,604 1,922
5. Total revenues 72,618 71,279 73,301 69,865 67,390 65,357

Target Sales from continuing operations were $72,618 million for 2014, an increase of $1,339 million or 1.9 percent from the prior year.
Cash flow provided by continuing operations
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Inventory is stated at the lower of LIFO cost or market. The cost of our inventory includes the amount we pay to our suppliers to acquire inventory, freight costs incurred in connection with the delivery of product to our distribution centers and stores, and import costs, reduced by vendor income and cash discounts. The majority of our distribution center operating costs, including compensation and benefits, are expensed in the period incurred. Inventory is also reduced for estimated losses related to shrink and markdowns. The LIFO provision is calculated based on inventory levels, markup rates and internally measured retail price indices. Under RIM, inventory cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to the inventory retail value. RIM is an averaging method that has been widely used in the retail industry due to its practicality. The use of RIM will result in inventory being valued at the lower of cost or market because permanent markdowns are taken as a reduction of the retail value of …show more content…
The valuation allowance for inventory valued under a cost method was not material to our Consolidated Financial Statements as of the end of fiscal 2014 or 2013. We routinely enter into arrangements with vendors whereby we do not purchase or pay for merchandise until the merchandise is ultimately sold to a guest. Activity under this program is included in sales and cost of sales in the Consolidated Statements of Operations, but the merchandise received under the program is not included in inventory in our Consolidated Statements of Financial Position because of the virtually simultaneous purchase and sale of this inventory. Sales made under these arrangements totaled $2,040 million, $1,833 million and $1,800 million in 2014, 2013 and 2012,

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