Canadian Tire fears a weak economy because it can greatly impact their MasterCard business and threat of new entrants. In the retail market, there are constantly new businesses entering the market and giving competition to retailers like Canadian Tire who may have difficulty to maintain their sales growth. “A cost-reduction program is accompanying the expansion. Canadian Tire has upgraded its supply chain, making it more efficient to get goods on the shelves. And because it buys from around the world, the rising Canadian dollar has meant imported goods are less expensive.”
Canadian Tire ratio explanations
Net Profit Margin: In 2012, Canadian Tire’s net profit margin was 3.5004% and increased by 0.004332 to 3.9336% in 2013. The increase in…show more content… This breach has cost the company not only a blemished reputation but $61 million in pre-tax expenses. Target wishes to assure their customers that they have taken all necessary steps to stop this from happening in the future. Although the investigations regarding this breach are still ongoing Target expects that this event will impact future operating results. The amount of lawsuits or fines that Target may be subject to has not yet been determined. For this reason Target has not included the results of the data breach in their financial reporting. It is expected that future costs will be substantial. Target is insured for up to $100 million with a $10 million deductible for their network security. This insurance along with other policies may protect Target from a considerable amount of liability.
Target holds a revolving credit facility for $2.25 billion that was unused in 2013. Target issued $1.5 billion in unsecured fixed rate debt at 4% in June 2012. This debt will not mature until July 2042.
Target pays an effective tax rate of 36.5%.
Target offers their employees a 401k plan which they are permitted to contribute up to 80% of their earnings. Target will match their contribution up to 5% of total earnings. In January 2009 Target closed its defined benefit plan to new participants. Target also offers limited health expense coverage to their retired…show more content… TJX’s ROE of 54% is above the minimum 17% which makes its stock a favorable one
Current developments:
• Investors should keep an eye open for stocks that are trading within 15% of their 52 weeks highs, as it is likely to continue its upward trend
• TJX’s price performance compared to all other stocks is unfavorable. A company's weighted relative strength, which should be no less than 80 indicates stock's price performance compared with the overall market over the past year, these companies should perform well for next 3 months. TJX's relative strength of 48 is too low as per Nasdaq.com o A prospective company should have a low Price/Sales ratio. Non-cyclical companies with Price/Sales ratios between 1.5 and 3 should not be purchased. TJX's P/S ratio of 1.53 Based o TJX is considered as one of most flexible retailers in the world with global sourcing abilities, it is currently expanding in ecommerce (tjmaxx.com) to gain even more market share and target customers in different demographics. o TJX is continuously upgrading their stores with approximately 700 stores over last five years , having about 1300 stores remodeled over last five