StudentShare solutions
Triangle menu

Working Capital Case Study: Target Corporation - Essay Example

Nobody downloaded yet

Extract of sample
Working Capital Case Study: Target Corporation

Although the formula for calculation is same as that of Cash Conversion cycle the emphasis in Operating cycle is the management of critical operational assets of the company to result in operational efficiency. Operating Cycle = Inventory Period + Accounts Receivable period – Accounts payable period. Thus, Operating Cycle for the period ending 2008 is 249 and for the period ended 2007 is 548.
The working capital(Current Assets – Current Liabilities) of the company has marginally reduced from $ 7124 for the year 2007 to $6976 for the year 2008. The current ratio(Current Assets- Current Liabilities) of the company has improved from 1.60 for the year 2007 to 1.66 for the year 2008. The recommendations for improving the Working capital situation are:
2) The working capital position of the company is effected by the huge receivalbes in the credit card segment. Credit Card receivables of the company account for about 46% of the total current assets. The company should have a stringent policy in place for recovery of credit card receivables. The company should try to factor the credit card receivables to some factoring organization and minimize the write-offs. This would result in cash inflow and would improve the working capital position of the company.
3) The company has acquired Fixed assets from its earnings. Thus, the company has used its short term sources for long term applications which is not a prudent financial policy. The company should acquire fixed assets from long term borrowings only. This will result in improvement of working capital position.
1) 2Reduce the inventory holding period without resulting in stock-out situation. 3Start by reducing your inventory and increasing inventory turnover. The ideal target would be of 30 days Inventory holding period.
The Financial effect of the above recommendations is that the Absolute value of the Inventory and Receivables would ...Show more

Summary

This could be on account of the recession prevailing in the current economy. The credit card receivable period has improved from 547 days in the year 2007 to 246 days in the year 2008.
The cash…
Author : schroederneva
Working Capital Case Study: Target Corporation essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Working Capital Case Study: Target Corporation"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Udoka corporation case study
Operational process is the core area that has to be very efficient to retain the sustainability of a company. Therefore, in order to maintain a higher level of operational process, proper evaluation and controlling activities are inevitable. The evaluation of operational analysis can be done using the financial evaluation techniques specifically the ratio analysis.
13 pages (3250 words) Essay
Target Corporation
Target Corporation is a widely traded stock and has seen more ups then downs. Target Corporation is a leader in the retail industry. Target Corporation will continue to be looked up to for corporations just starting out. There is a lot to learn from evaluating a company like Target Corporation.
5 pages (1250 words) Essay
Udoka corporation case study
Udoka Corporation is engaged in mobile manufacturing business and technology and innovation is the base of this company. It is operating in a highly competitive business environment where every aspect of performance is crucial for sustaining in such severe competitive market.
12 pages (3000 words) Essay
NEWS CORPORATION CASE STUDY
NEWS CORPORATION CASE STUDY News Corporation is one of the world’s largest media conglomerates in the world. The Journey began in 1923 with publishing of a local newspaper in Adelaide, Australia by Ruport Murdoch’s father. Currently News Corporation media conglomerate holds diversified media portfolio in many parts of world.
9 pages (2250 words) Essay
Corporation Law case study
However, if notice was given but the meeting was called for a date before the 2 mos expires, the resolution can be dealt with (s 203D(2) and s 329(1A)). This decision of such issue requires the shareholders meetin approval. There are two types of resolutions.3
10 pages (2500 words) Essay
Case study description and analysis of SONY Corporation involved in the production and distribution of products
ocketable transistor radio (1957), smallest and lightest micro-tv (1962), first triniton color tv (1968), walkman (1979), and minidisc (1991) among others. (Sony History, 2008b) Today, Sony manufactures electronics related to AV/IT products and components; playstation; mobile
8 pages (2000 words) Essay
Nike Corporation Case Study
Nike had a humble beginning with its principal owner and founder selling his wares personally. Fortune favours the brave and Nike is a now multinational and a major in the shoes and sportswear Industry, far above all its rivals.
8 pages (2000 words) Essay
Target Corporation
However, this growth in credit caused a considerable increase in the company’s earning which made the whole plan seem like a risky prediction gone better. From this article, a few points are worth noting.
1 pages (250 words) Essay
Xerox Corporation Case Study 03066
Governance, ethics, reporting manipulation, increased materiality in numbers, polished earnings in terms of creative accounting and auditing frauds are the widespread outcomes of the said competitive pressures (Ricks, 2009; Verbeke, 2013). The
10 pages (2500 words) Essay
Xerox Corporation Case Study 03066
Governance, ethics, reporting manipulation, increased materiality in numbers, polished earnings in terms of creative accounting and auditing frauds are the widespread outcomes of the said competitive pressures (Ricks, 2009; Verbeke, 2013). The
10 pages (2500 words) Essay
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Click to create a comment