Accounting

This document is currently being drafted in order to assess the financial compatibility and performance of Target Corporation of the year 2009. Target Corporation is big player in the market and plays a pivotal role in the industry. The ambition of the Target Corporations management is to provide substantial, vital and appropriate information to its valuable customers in the best possible manner. The summary of the Target Corporations financial performance from the perspective of both stakeholders (Company 1  Company 2) are stated below

COMPANY 1
Company 1 should take into consideration the thorough analysis of Earning per Share (EPS), dividend Per Share (DPS) and dividend pay out ratio before take part through the sales of new stocks. The high net earnings not only reflects on the share price but it also very handful to uplift the goodwill of the company. Lower EPS is an important evidence of the companys performance and it suggest that the companys internal policies make a significant impact on share price and also gives the indication of its future strategy towards the goals. While, the DPS and dividend payout ratio increases in the year 2009 as compare with the year 2008. In the year 2008, dividend payout ratio is 16 and the DPS was 0.54. Due to sluggish economic scenario, company cant generate more net income in the year 2009 but the management of the company realizes the fact that the outlook of companys stock makes an impression on the growth of the company so due to this fact management applied effective dividend policy which in the end attracts the potential investor towards the companys stock.      

COMPANY 2
Company 2 should take into consideration the thorough analysis of Current  Quick ratio, Debt and Interest Coverage Ratio. Target Corporations current ratio and quick is slightly higher in the year 2009 than the year 2008 and indicates a higher margin of safety with respect to meeting current obligations (Besley, Brigham, 2001).. Target Corporations current ratio will allow them to take more debt as compared to previous years. Although Target Corporations has made short-term investments but it still hasnt lowered the current ratio which is pretty stable and healthy as compared to the previous year practices. In addition, proper maintenance of working capital management strategy has ensured a healthy quick ratio, one that is higher than the industry leaders and this gives a positive signal to the market, indicating that there is no liquidity problem for Target Corporations. Because of expansion in the business, Target Corporations has plenty of financial obligations, most of which ahs been acquired through debt. In 2009 especially, Target Corporations reliance on debt financing has increased significantly because of which the debt ratio is higher than the year 2008 which is 38. Target Corporations management should redefine its debt management strategy and ensure that all the debt utilizes in a proper (Besley, Brigham, 2001). Times-Interest-Earned (TIE) ratio is concerned it looks unhealthy as far as companys future operations are concerned and it also gives an indication that debt holders are concerned about the companys performance. It is not a good signal for the companys perspective (Myers, Brealey and Marcus, 2001).

There are some differences in both companys information because EPS, Dividends pay out ratio and DPS suggests that how much of the companys earning is distributed to its share holder in the form of dividend and also the rate of companys earning on each share. Dividend measures the ability of a company to pay dividend on preference share, which carry a stated rate of return. While, Current assets and current liabilities also suggest the firms liquidity position and sends signal to the mangers that firm is financial crises or on the edge of financial crunch. Section of EBIT and interest expense shows the debt servicing ability and capability of a company and also indicator of a companys ability to meet its interest payment obligations. Debt section shows the percentage of total asset financed by debt, from a creditors  banks view point, the lower debt ratio gives a positive signal to the creditor (Myers, Brealey and Marcus, 2001).