Refer to the financial statements of Target given in Appendix B at the end of this book.

Data from in Appendix B

Required:
1. What does the company include in its category of cash and cash equivalents? How close do you think the disclosed amount is to actual fair market value?
a. All assets with a fair value measurement.
b. Highly liquid investments with an original maturity of three months or less from the time of purchase.
c. Cash and accounts receivable (net).
d. Cash and bank overdrafts.
e. None of the above.
2. What expenses does Target subtract from Total revenue (net sales) in the computation of Operating income? (Select all that apply.)
a. Cost of sales
b. Selling, General, and administrative expenses

c. Net interest expense
d. Provision for income taxes
e. Depreciation and amortization
3. Compute Target’s receivables turnover ratio for the current year using the “Total revenue” for net sales and the account “Accounts and other receivables.” Round your answer to the nearest whole number.________________________
4. What characteristic of its business is the main cause Target’s receivables turnover ratio is so high?
a. Its net profit margin is very high.
b. Most of its sales are for cash or credit cards such as Visa and Mastercard.
c. It sells a wide variety of merchandise and food.

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Consolidated Statements of Financial Position (millions, except footnotes) Assets Cash and cash equivalents Inventory Other current assets Total current assets Property and equipment Land Buildings and improvements Fixtures and equipment Computer hardware and software Construction-in-progress Accumulated depreciation Property and equipment, net Operating lease assets Other noncurrent assets Total assets January 30, February 1, 2021 2020 $ 8,511 $ 10,653 1,592 20,756 6,141 31,557 5,914 2,765 780 2,577 8,992 1,333 12,902 6,036 30,603 6,083 2,692 533 (20,278) 26,879 2,227 1,386 $ 51,248 $ 42,779 (19,664) 26,283 2,236 1,358