Return to Target’s 201 0 annual report. For instructions on how to access the report online, see the Continuing Financial Statement Analysis Problem in Chapter 2. On page 33 of the annual report you’ll find Target’s income statement for the year ending January 29, 201 1 (called the Consolidated Statement of Operations). On page 34, you’ll find Target’s balance sheet as of January 29, 201 1 (called the Consolidated Statement of Financial Position). On page 36 you’ll find Target’s statement reconciling the changes in each account in shareholders’ equity. The statement is called the Consolidated Statement of Shareholders’ Investment.
Now answer the following questions:
1. Look at Target’s balance sheet. What are the different types of stockholders’ equity reported on Target’s balance sheet? Read the financial statements, including the statements of shareholders’ investment, and describe each type of stockholders’ equity.
2. Look at Target’s statement of shareholders’ investment. What happened during the years ending January 29, 2011 and January 30, 2010 in each account of the shareholders’ equity?
3. Look at Target’s balance sheet and income statement. What is Target’s return on equity (ROE) for the year ending January 29, 2011 ? What does this ratio tell you?