# Target Corporation and Costco Wholesale Analysis

## Question

Assignment:
You are the assistant to the CEO of a major company.
Your CEO keeps an eye on the competition, and asks you to do the following.
Using ratio analysis, compare two major competitors in the same industry.

Instructions:
Analyze Target Corporation and Costco Wholesale.
Select the 10 most important financial ratios for these two companies and calculate each for the last 2 fiscal years using Excel.
Create a single Excel file for your entire assignment.
You may obtain financial information and the companies' latest annual reports on the web directly from MSN Money or Yahoo Finance or Morningstar.
For additional information, look for the SEC Form10-K link from one of the MSN Money, or Morningstar, or Yahoo Finance financial sites.
You should calculate, and comment upon, all 10 financial ratios for the last 2 fiscal years.
All calculations should be shown, and all answers should be thoroughly explained.
It is useful to compare financial ratios for a company with financial ratios of its industry.
Industry financial ratios can be found on Morningstar.com, Yahoo Finance and MSN Money.
When using balance sheet items to calculate ratios, for each year be sure to average the beginning-of-year and end-of-year amounts to get the average for that year.

What can you tell from your analysis?
What are the strengths and weaknesses of each company?
Which is the stronger competitor?

## Solution Preview

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What can you tell from your analysis?
What are the strengths and weaknesses of each company?
Which is the stronger competitor?
According to analysis of financial ratios and management key statistics, Costco Incorporated is a better stock compared to Target Corporation. In the world of retail, the industry is dominated by Walmart, but Costco Inc. with a lower Market Cap compared to Walmart could compete in the market in terms of growth and returns....
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