Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 3, 2018, are available in Connect. This material is also available under the Investor Relations link at the company’s website (www.target.com). Long-term solvency refers to a company’s ability to pay its long-term obligations. Financing ratios provide investors and creditors with an indication of this element of risk. 

Required: 

1. Calculate the debt to equity ratio for Target at February 3, 2018. The average ratio for companies in the Discount Retailers industry sector in a comparable time period was 2.0. 

2. Calculate Target’s times interest earned ratio for the year ended February 3, 2018. The coverage for companies in the Discount Retailers industry sector in a comparable time period was 6.9.