Target Corporation Case Study Financial Management

Introduction:
This memorandum shall provide an in depth analysis of Target Corporation’s performance for the most current for the year 2014. To obtain a better understanding of Target Corporation’s performance the following categories shall be addressed: Preliminary analytical procedures, Accounting policy efficiency and reliability, Evaluation of Disclosure Controls, Evaluating Company’s technology system and its Risks, Substantive Procedures, Payout ratio in the Target Corporation financials, Fraud Considerations and Extended Procedures.
For the most part, Target Corporation’s performance is positive and has been consistently growing in sales. The company has increased its stock value through additional sales resulting from a deliberate

focus on its signature departments, such as baby, children and wellness categories. The strength of the company rests on its hip and urban approach to the overall consumer experience at its department stores. The company however has yet to develop a proper online presence and it must do so to compete with the likes of Walmart.
Although the accounting procedures at Target Corporation have proved to be accurate and reliable, the company must keep in mind to also have reliable assumptions for future activity. Also, an attention to accurate assumptions and financial statements serves to prevent accounting risks that may otherwise occur.
A major liability experienced by Target Corporation is in its use of technology software related to capturing its sales by the consumers.

For example credit card transactions and security breaches have occurred which have cost the company million of dollars. Target Corporation must do a better job of securing its data to prevent future loss in profit, sales, and stock values.
The company has a responsibility to establish and implement internal and external controls for proper accounting reporting. Target Corporation has done a good job of developing these controls and thus the accounting has been reliable and accurate. To assist in a audit of the company, it must establish substantive procedures that can follow up on the EPS accounting policy. A testing to confirm events and their occurrence would be helpful to ensure that the events and transactions have actually occurred and are recorded in the financial statements accordingly.
Target Corporation must also ensure the its accounting procedures prevent fraud occurrence. The most effective method for combating potential fraud is to develop substantive internal accounting policies. For the most part, the company has done a good job in establishing the principles and procedures necessary to prevent material

misstatements.

Background:
Target Corporation was founded in 1902 in Minnesota. They offer fashionable and differentiated merchandises at discounted price for customers. It is designed to be a one stop for customer to get designer items. They also currently offer brand credit cards (Target Credit Card and Target Visa Credit Card). They also sold in the first quarter of 2013 U.S. consumer credit card portfolios, today TD Bank does underwrite, funds and owns Target credit card and Target Visa receivables. Target generated in beginning of 2015 72,618 USD million, their net income margin was -2.25%.
In the next

Three sources to determine Target Corporation’s performance

A number of articles describe Target Corporation as being generally positive and consistently growing in performance. Some factors taken into consideration in determining overall performances are stock prices, sales, and SWOT analysis.

In 2015 stock prices of Target Corporation increased as well as overall sales in the clothing department and the company zeroed in on its signature departments. These signature departments are the baby, children, and wellness categories. An article titled “Target Extends Streak of Rising” and printed, August 20th 2015 stated that by showcasing additional mannequins with various clothing styles Target Corporation experienced three times faster sales than the latest quarter in its signature clothing departments. For stores open more than one year this increase equaled a rise in sales at 2.4% above the previous quarter. The article also discussed other products offered by the company and found that the clothes and home décor departments provided an increase in higher sales at Target Corporation.