1. Target was mentioned in the chapter as a company that has a high degree of seasonality (and associated working capital issues). Let us use the Internet to examine the seasonality. Go to www.target.com. Scroll to the bottom of the page, and under the “more” heading, click on “Investor Relations.” Click on “Annual Report.” Find the option for the 10-K and download the 10-K. Search for “Quarterly Results (unaudited),” which is a footnote to the 10-K. You will see historical data for both quarterly and annual periods.
2. Based on the observed data, which of the four quarters is normally best for Target? Why?
3. Which quarter is normally the worst? This may be a close call.
4. Taking the most recent year in which four quarters of data are shown, what percentage of total fiscal year earnings does the best quarter represent?