Porters Five Forces Essay

1406 Words Apr 17th, 2016 6 Pages
Target Corporation was founded in 1902 by George Dayton. Target set out on a mission to provide an environment where customers can conveniently shop, while purchasing merchandise at affordable discount prices. Today, Target Corp. has accomplished their mission in creating a one-stop experience for customers by differentiating products (making them unique) and increasing the outstanding value. Target Corporation retails general merchandise such as household “essentials, including pharmacy, beauty, personal care, baby care, cleaning, and paper products; music, movies, books, computer software, sporting goods, and toys; electronics, such as video game hardware and software; and apparel for women, men, boys, girls, toddlers, infants, and …show more content…
Target had a profit margin of 4.17% in 2013, 2.72% in 2014, and -2.25% 2015. For each dollar of sales NVR retains 6 cents in earnings. Although the company has increased revenue for 2015 they should focus on reducing cost to improve their profit margin.
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

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