217353875 Case Study 20 Target Corporation
Target Corporation
Patrick Cunningham M03619570
Professor John Phelps, Ph.D.
February 6, 2014
Executive Summary:
This case study analyzed five different projects Target Corporation had to decide on capital spent for which project created the most value and the most growth for the company and its shareholders. By analyzing the financial statements and exhibits of each project, I was able to determine the positives and negatives of each of these alternatives. The alternatives were Gopher Place, Whalen Court, The Barn, Goldie’s Square, or Stadium Remodel. The recommendation provided for Target Corporation is choosing the Stadium Remodel project. There were three main factors used for choosing this project. First, its low initial investment that makes the risk for Target much lower. Second, by implementing this project it continues the strong brand image Target has with its customers. Lastly, the Stadium Remodel project uses only a small percentage of total capital expenditures making it possible for Target to have more capital available for future capital expenditures.
Table of Contents:
Executive Summary – Page 1
Situational Analysis – Page 4
Alternatives – Page 5
Recommendation – Page 10
Appendices – Page 13
Situational Analysis: Target Corporation has become a strong performing company in the retail industry in part because of its successful investment decisions and continued growth. That is why when Dan Scovanner, CFO of Target, and the four other executives in the CEC (Capital Expenditure Committee) meet it is of high importance. The approval or denial of CPR’s (Capital Project Requests) has the potential to set precedents that would affect possible decisions in the future. Every month the CEC meets to go over new CPR’s that could have a lasting impact on the short-term and long-term profitability of Target. For the month of November in 2006, there were five particular projects Scovanner knew were going to be the most highly
Patrick Cunningham M03619570
Professor John Phelps, Ph.D.
February 6, 2014
Executive Summary:
This case study analyzed five different projects Target Corporation had to decide on capital spent for which project created the most value and the most growth for the company and its shareholders. By analyzing the financial statements and exhibits of each project, I was able to determine the positives and negatives of each of these alternatives. The alternatives were Gopher Place, Whalen Court, The Barn, Goldie’s Square, or Stadium Remodel. The recommendation provided for Target Corporation is choosing the Stadium Remodel project. There were three main factors used for choosing this project. First, its low initial investment that makes the risk for Target much lower. Second, by implementing this project it continues the strong brand image Target has with its customers. Lastly, the Stadium Remodel project uses only a small percentage of total capital expenditures making it possible for Target to have more capital available for future capital expenditures.
Table of Contents:
Executive Summary – Page 1
Situational Analysis – Page 4
Alternatives – Page 5
Recommendation – Page 10
Appendices – Page 13
Situational Analysis: Target Corporation has become a strong performing company in the retail industry in part because of its successful investment decisions and continued growth. That is why when Dan Scovanner, CFO of Target, and the four other executives in the CEC (Capital Expenditure Committee) meet it is of high importance. The approval or denial of CPR’s (Capital Project Requests) has the potential to set precedents that would affect possible decisions in the future. Every month the CEC meets to go over new CPR’s that could have a lasting impact on the short-term and long-term profitability of Target. For the month of November in 2006, there were five particular projects Scovanner knew were going to be the most highly