Porters Five Forces Essay
Target’s experienced a decrease in their total assets from 2013 which was $ 48,163,000 to $ 44,553,000 in 2014. This was a 7.9% decrease. Also, they had a decrease in total assets of $41,404,000 in year 2015 which was 7.0%. We can conclude that the decrease in total assets was due to the increase in alternative substitutes, which decreased inventory as well. Their return on assets was 6.30% in 2013, 4.33% in 2014, and -3.70% in 2015. Return on assets shows how well a company is using their assets to generate income. Target has not been using their assets efficiently and has become less profitable because of the decrease in 2015.
From 2013 to 2014 total liability decreased by 10.4% and from 2014 to 2015 it decreased by 3.3%. This increase was caused by Target making purchases on accounts rather than spending their cash on hand and by receiving money in advance before earning the money. Meanwhile, because the liability has decreased the total debt ratio reveals that Target is a not a stable company and do not have the ability to pay off its liabilities with its assets. In 2013 total debt ratio was 1.06 which means the company approximately had 4 times as many assets