Financial Case 5-1

This case uses both the income statement (consolidated statements of operations) and the balance sheet (consolidated statements of financial position) of Target Corporation.

Requirements

1. What was the value of the companys inventory at January 29, 2022 and January 30, 2021?
2. Review Note 10 (specifically Inventories) in the Notes to Consolidated Financial Statements. What does Target include in the cost of inventory?
3. What was the amount of Targets cost of goods sold (cost of sales) for the year ending January 29, 2022, and the year ending January 30, 2021?
4. What income statement format does Target use? Explain.
5. Compute Targets gross profit percentage for the year ending January 29, 2022, and the year ending January 30, 2021. Did the gross profit percentage improve, worsen, or hold steady? Assuming the industry average gross profit percentage is 35%, how does Target compare in the industry?