1. If projectingTarget’s earnings per share based solely on EPS reported over th

Question

1. If projectingTarget’s earnings per share based solely on EPS reported over the most recent three years, would you project increasing or decreasing EPS?

2. How manyshares were included in diluted earnings per share, but not basic earnings per share, due to share-based compensation awards?

3. Refer to Target’sfinancial statements for the year ended Jan. 30, 2016. Note 12 provides information on Target’s inventories. What method does Target use to report most of its inventories? If Target changed that method to another method, what are the steps Target would take to account for and report the change?

4. Suppose that Targetuses FIFO costing method but decided to change to the LIFO method. What are the steps Target would take to account for and report the change?

Explanation / Answer

1.Answer:

If Projecting targets's earnings per share SOLELY based on EPS reported over the most recent three years, then project may decrease EPS because projections prepared based on previous years will be based on actuals if there exists a lower EPS project will be effected now.

Now a days investors mainly focuses on future price of the investments so projections is to be prepared on the basis of FUTURE EPS which is based on projected(estimated for future).

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