Target Corporation

Definition

Target Corporation is a major American retail chain offering a variety of products, including groceries, apparel, electronics, and home goods. It utilizes sophisticated cash management strategies to maintain liquidity and optimize working capital.

5 Must Know Facts For Your Next Test

1. Target uses trade credit extensively to manage its accounts payable and improve cash flow.
2. The company's inventory management system helps in reducing holding costs and improving turnover rates.
3. Target's cash conversion cycle is critical for maintaining liquidity and ensuring operational efficiency.
4. Effective cash forecasting at Target allows the company to plan for both short-term needs and long-term investments.
5. Supplier relationships are crucial for Target's trade credit terms, impacting payment schedules and inventory financing.

Review Questions

• What role does trade credit play in Target Corporation's cash management?
• How does Target optimize its working capital through inventory management?
• Why is the cash conversion cycle important for Target Corporation?

Related terms

Trade Credit: A form of short-term financing where suppliers allow buyers to purchase goods or services on account.

Working Capital: The difference between current assets and current liabilities, representing liquidity available to a business.

Cash Conversion Cycle: A metric that expresses the time it takes for a company to convert its investments in inventory into cash flows from sales.