Target Swot Analysis 2012

First and foremost, Target’s ROE ratios for the last five years are experiencing ups and downs; it had lowest ROE ration of -0.108 for the period ending in 1/31/15, and the ROE was 0.25 for the period ending in 1/31/16. Except for the year ending in 1/31/15, Target generated profit in the last five years, and the increasing trend of ROE indicated that Target was succeeded in increasing efficiency without needing more capital. Although we cannot know from the analysis what lead to the great drop in Net Income, Target did some changes next year and bring back to positive profit in 2015. Compared to its competitors, Target has the second highest ROE in the latest period. As we would talk about Target’s expansion later, the increasing ROD ratio in 2015 is a result of lower promotional activities expensed during the period.
Same ups and downs are in the Profit Margin ratios for the similar periods. According to MD&A for fiscal 2015, the increasing gross margin rate is due to favorable category sales mix and lower advertising
In the last five years, Target had a decrease in value of Capital Expenditure to Depreciation ratio, and such decreasing trend tells the outside users that Target was investing less money in themselves. According to MD&A, capital expenditures decreased in 2015 as it opened fewer large-format stores and realized efficiency gains in technology. Although Target decreased its expansion in 2015, but it expects the capital expenditures in 2016 to return to previous level. Compared to its competitors in the market, Target is below the average ratio, and located as the second lowest one. Target is trying to be more cost-saving than before, so it cut the capital expenditures in return of higher profit margin, while its competitors is expensing and investing