What is a common-sized balance sheet

Assignment Help Financial Management
Reference no: EM131815506

DISCUSSION 1: The Balance Sheet

Referencing this week's readings and lecture, what information is provided in the balance sheet? What is a common-sized balance sheet and how do you create one? For your final project company, does anything stand out on the balance sheet? FINAL WEEK PROJECT IS APPLE COMPANY

DISCUSSION 2: Understanding the Notes to the Balance Sheet

Your friend, Liz, loves to shop at Target and is now interested in investing in the company. Tom, another friend, has told her that Target's debt structure is risky with obligations of nearly 74% of total assets. Liz sees that debt on the balance sheet is 65% of total assets and is confused by Tom's comment. Write an explanation to Liz discussing the debt structure of Target and why Tom thinks Target is risky. Be sure to explain clearly what information appears on financial statements, as well as what information does not appear directly on the financial statements. Use the information below in your discussion.

At fiscal year-end February 2, 2008, Target Corporation had the following assets and liabilities on its balance sheet (in millions):

Current liabilities

$11,782

Long-term debt

15,126

Other liabilities

2,345

Total assets

44,560

Target reported the following information on leases in the notes to the financial statements:

Total rent expense was $165 million in 2007, $158 million in 2006, and $154 million in 2005, including percentage rent expense of $5 million in 2007, 2006, and 2005. Most long-term leases include one or more options to renew, with renewal terms that can extend the lease term to more than 50 years. Certain leases also include options to purchase the leased property.

Future minimum lease payments required under non-cancellable lease agreements existing at February 2, 2008, were:

Future Minimum Lease Payments (in Millions)

Operating Leases

Capital Leases

2008

$ 239

$ 12

2009

187

16

2010

173

16

2011

129

16

2010

123

17

After 2010

2, 843

155

Total future minimum lease payments

$3694 (a)

$232

Less: Interest (b)


(105)

Present value of minimum capital lease payments


$127 (c)

(a) Total contractual lease payments include $1,721 million related to options to extend lease terms that are reasonably assured of being exercised, and also include $98 million of legally binding minimum lease payments for stores that will open in 2008 or later.

(b) Calculated using the interest rate at inception of each lease.

(c) Includes current portion of $4 million.

Reference no: EM131815506

Questions Cloud

Interest with annual compounding : What is the future value in five years of $100 invested every year at 10% interest with annual compounding?
How much cash was collected from making sales : Sales for the period total $400,000, of which $40,000 was directly for cash. How much cash was collected from making sales and collecting accounts receivable
Sustainability and ethical considerations : Discuss potential public relations strategies while also including sustainability and ethical considerations.
Define objectives of management accounting : Objectives of Management Accounting The Institute of Management Accountants (IMA) is composed of nearly 70,000 members. The IMA "Objectives of Management.
What is a common-sized balance sheet : What is a common-sized balance sheet and how do you create one? For your final project company, does anything stand out on the balance sheet?
Determine the amount of underapplied : Determine the amount of underapplied or overapplied manufacturing overhead fort he period
What a your firm operating cash flow : What a your firm's operating cash flow (OCF)
Cost-benefit of the ethical environment : Cost-Benefit of the Ethical Environment A poor ethical environment results in costs to the company. On the other hand, a good ethical environment creates.
Find the direct materials in the flexible budget for august : Nasson Corporation manufactures and sells a single product. The direct materials in the flexible budget for August would be closest to

Reviews

Write a Review

Financial Management Questions & Answers

  Forecasts of revenues over the lifetime of project

These are the forecasts of revenues over the lifetime of a project. Assume all cash flows occur at the end of the year. This hint is optional; you don't have to read this. This is only to help you, if you are confused by this hint just ignore it and ..

  What is the smallest expected gain

A stock has an annual return of 13 percent and a standard deviation of 60 percent. What is the smallest expected gain over the next year with a probability of 1 percent?

  Common stock to investor requiring rate of return

What is the current value of Brookman's High Roller Casinos common stock to an investor requiring a 15 percent rate of return?

  Calculate the cost of preferred equity

Calculate the cost of preferred equity. Calculate the after-tax cost of debt.

  Save at the end of every year to reach your retirement goal

How much more do you need to save at the end of every year to reach your retirement goal?

  Effective interest rate-what is the effective interest rate

(Effective interest Rate) A store will give you a 3% discount on the cost of your purchase if you pay cash today. Otherwise, you will be billed the full price with payment due in 1 month. what is the implicit borrowing rate being paid by customers wh..

  What is the nominal interest rate compounded monthly

What is the nominal interest rate compounded monthly?

  Capital structure consists solely of debt and common equity

Miller Von Enterprises' capital structure consists solely of debt and common equity. It can issue debt at rd = 10.6%, and its common stock currently pays a $1.91 dividend (D0= $1.91). The stock's price is currently $24.75, its dividend is expected to..

  The company’s financial effectiveness

I have been allocated to do Head Company2012and review 3 financial statements, namely Income statements, balance sheets, and cash flow statements of a particular year, evaluate the company’s financial effectiveness

  Stock''s expected growth rate according to the gordon model

what is the stock's expected growth rate according to the Gordon model?

  What is target capital structure-residual dividend policy

Global Inc. has its own target capital structure that consists of debt and equity. The firm anticipates that its capital budget for the next year will be $1,500,000. If it reports net income of $1,200,000 and wants to maintain a 20% payout ratio, wha..

  Elements of a strategic purchasing plan

1. What decision areas are associated with purchasing strategy? 2. Describe the elements of a strategic purchasing plan.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd