hat information is provided in the balance sheet? What is a common-sized balance sheet and how do you create one?
Discussions
To participate in the following discussions, go to this week’s Discussion link in the left navigation.
The Balance Sheet
Referencing this weeks 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?
Respond to at least two of your classmates posts.
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
Targets 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 Toms 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.
Respond to at least two of your classmates posts.
Respond to at least two of your classmates posts.
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