The Determinants of Financial Risk Performance of Target Corporation In United States

Maggi Leow

MPRA Paper from University Library of Munich, Germany

Abstract: This research study examined firm specific (internal) and macroeconomic (external) factors of determining financial risk performance at Target Corporation in the United States during a ten-year period, 2014-2023. The company had variability in operating profitability and a number of indicators had indicated an increase in financial pressure, which is why it is essential to know what factors determine financial risk. Financial ratios and economic indicators were analyzed with the help of SPSS which included correlation and regression models. The three models were created to identify the impact of internal factors, external factors, and a combination of both sets of variables on Operating Profit Margin (OPM) that served as the primary proxy of financial risk. As per the results, Net Profit Margin (NPM) has been identified as the most important internal factor to enhance OPM, whereas Operational Risk has been identified as the most important internal factor to decrease OPM. With GDP and interest rate having weak effects on the outside, it means that Target is more affected by its internal managerial factors than the macroeconomic factors. The results indicate that the optimization of costs, operational failures, and the risk management of interest rate risks are pivotal in reducing the financial risk. This study has the limitation of time as it considers a single company and 10 years of data, which might not portray the industry in general; thus, further studies can involve multiple companies and other financial indicators.

Keywords: Target Corporation; Financial Risk Performance; United States; Operating Profit Margin; Net Profit Margin; Operational Risk; GDP; Interest Rate (search for similar items in EconPapers)
JEL-codes: G3 G32 (search for similar items in EconPapers)
Date: 2026-01-08
New Economics Papers: this item is included in nep-mac
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