Overview of Target Corporation Versus Wal-Mart Inc.

Overview of Target Corporation versus Wal-Mart Inc.

Overview

This paper will give a summary of Target corporation versus Wal-Mart stores, Incorporated. In the following weeks it will compare the financial performances of these two companies, by evaluating circumstances such as the times interest earned, return on equity, return on assets and other factors. This paper will present an overview of the exchanges on which both company’s stock is traded. It will also present characteristics of that particular exchange which may have led the company to be listed there versus another exchange. This summary will also explain the types of securities both Wal-Mart and Target have outstanding, such as the bonds, preferred stock or the common stock and thus will explain the characteristics of those securities and if they have assisted the company in gaining and raising capital. Finally it will explain the purposes of the four basic financial statements: the balance sheet, income statement, statement of retained income, and the statement of cash flow; which are found in each company’s annual report.

Where the stock is traded

In 1970, Wal-Mart started offering common stock to the public. The stock is traded on the New York Stock Exchange under WMT. In 1974, they declared their first cash dividend, and also started provided shareholders with an annual dividend, paid quarterly, every year since then (walmartstores.com, 2007). The Target corporation stock is also traded on the Target’s stock is also traded under the New York Stock Exchange under the stock quote TGT and is a common stock (target.com, 2006).

Reasoning behind trading on NASDAQ

Company’s leaders have a desire to learn and cultivate a curiosity for new dimensions of knowledge, becoming life-long learners with a perpetual sense of wonder. Targets and Wal-Mart strive for wisdom and do not confuse it with wit. Companies thrive on integrity recognizing that without integrity all other ingredients of leadership will not matter. Shopping in a Target or Wal-Mart store working conditions and effect on communities the two stores is similar when it comes to the characteristics. Corporation utilizes a variety of measures to evaluate the merits with in the company.

Top Management is one characteristics Target and Wal-Mart this allows the senior management is available thru the network is capable of locating managers. Middle management shows the preference for strong management, capital structure is irrelevant and we will consider restructuring situations. Wal-Mart and Targets has to be profitable as a gross margin level operating a profit for the company. Market share allow the company to have a reasonable share in the market. Assets play a role in the company characteristics this shows there has not been a deferred problem and there are substantial assets. Last there is quality with in a company reputation for industry segment.

Now that Kmart is out of the market, Target now get the attention of Wal-Mart retailers. Shoppers go to Targets for a section that includes detergent and batteries in the tradition of all discount stores. Wal-Mart is considering a mega store that supplies a one-stop shop for the American people. Given that people complete an entity as efficient and as disciplined from a cost standpoint as Wal-Mart, it is absolutely required year in an year out that Wal-Mart seek new and different ways to deliver satisfaction to the quest (consumer). According to Targets chief financial officer (TGT.corporation,retrieved April 15, 2008,http://www.targetv.walmart.com) Targets focus more attention on the quality of product and the relentless pursuit of cost control. The marketing is not something that Wal-Mart makes a priority. One way that Target is trying to offset such disparity on the balance sheet is by expanding it credit card operations. Credit card income generated millions in the pretax profit or about 15 percent of Targets pretax profit last year.

Characteristics of Securities

There are several characteristics of these securities that could cause both Target Corp. and Wal-Mart Stores, Inc. to raise capital. Each company has bonds, preferred and common stock; to help in determining if capital should be raised. According to Block and Hirt (2005), bonds are debt instruments that have a fixed life and must be repaid at maturity. Preferred stock is the leased used because the dividends are not tax-deductible. Common Stock is sold because companies are seeking new equity capital. For Target, the peak from November to the end of December is when the company’s working capital is at its greatest. Based on the Annual Report for 2007, the increase in working capital during this time is typically financed