Target Corporation (TGT)
Profitability ratios
Return on sales
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 4.79% | 3.06% | 8.30% | 5.43% | 5.36% |
| Operating profit margin | 5.34% | 3.54% | 8.44% | 7.10% | 6.00% |
| Pretax margin | 4.95% | 3.15% | 8.41% | 6.02% | 5.41% |
| Net profit margin | 3.87% | 2.56% | 6.56% | 4.74% | 4.23% |
Profitability ratios provide insight into a company's ability to generate profits relative to its revenues and operating costs. Analyzing the profitability ratios of Target Corporation over the past five years reveals fluctuations in its profitability performance.
1. Gross Profit Margin:
- Target's gross profit margin has varied significantly, ranging from a low of 3.06% in January 2023 to a high of 8.30% in January 2022. In 2024, the gross profit margin improved to 4.79%, indicating the company's ability to efficiently manage direct costs associated with producing goods.
2. Operating Profit Margin:
- The operating profit margin of Target Corporation has also shown fluctuations, from a low of 3.54% in January 2023 to a high of 8.44% in January 2022. In 2024, the operating profit margin increased to 5.34%, reflecting the company's operational efficiency in managing both direct and indirect expenses.
3. Pretax Margin:
- Target's pretax margin has fluctuated over the five-year period, with the highest margin of 8.41% in January 2022 and the lowest margin of 3.15% in January 2023. In 2024, the pretax margin improved to 4.95%, indicating the company's ability to control non-operating expenses and taxes effectively.
4. Net Profit Margin:
- The net profit margin, which indicates the company's bottom line profitability after all expenses, has also shown variability. Target's net profit margin ranged from 2.56% in January 2023 to 6.56% in January 2022. In 2024, the net profit margin increased to 3.87%, demonstrating the company's ability to generate profits after all expenses are deducted.
Overall, the analysis of Target Corporation's profitability ratios suggests that the company has experienced fluctuations in profitability over the past five years. While improvements were seen in 2024 compared to the previous years, it is essential for Target to sustain and enhance its profitability margins to ensure long-term financial viability and growth.
Return on investment
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 10.31% | 7.21% | 16.62% | 12.76% | 10.89% |
| Return on assets (ROA) | 7.48% | 5.21% | 12.91% | 8.52% | 7.67% |
| Return on total capital | 43.17% | 34.69% | 72.72% | 45.17% | 39.54% |
| Return on equity (ROE) | 30.81% | 24.75% | 54.15% | 30.25% | 27.73% |
Target Corporation's profitability ratios have shown fluctuation over the past five years.
- Operating return on assets (Operating ROA) has generally improved, with a notable increase from 2018 to 2019, followed by a more gradual increase in subsequent years. This indicates that the company has been more efficient in generating operating income relative to its total assets.
- Return on assets (ROA) has also shown an upward trend, indicating the company's ability to generate profit from its assets. Although there have been fluctuations, the overall trend suggests improved asset utilization and profitability.
- Return on total capital has exhibited significant variability, reaching a peak in 2022 before declining in the following years. This ratio represents the overall return generated on the total invested capital, including debt and equity, highlighting the company's ability to generate profits relative to its total capital base.
- Return on equity (ROE) has shown a similar pattern to ROA, indicating that Target has been able to deliver increased returns to its equity shareholders over the years, with a notable improvement from 2021 to 2022.
Overall, Target Corporation's profitability ratios demonstrate a mix of improvement and fluctuations over the past five years, reflecting the company's performance in generating profits from its operations and capital structure.