Target corp is currently seeking additional capital to expand it's operation. Two companies have shown interset. The first company would like to have part ownership. Company 2 would like to provide target with a loan. Write a memo in which you explain what information from target corp. financial statement will be highlighted.

[Your Name]

[Your Position]
[Date]

Subject: Highlighted Information from Target Corp. Financial Statements

Dear [Recipient's Name],

I am writing to provide an overview of the information from Target Corp.'s financial statements that should be highlighted for the two companies expressing interest in providing additional capital for the company's expansion. The first company is interested in part ownership, while the second company wants to offer Target Corp. a loan. Understanding the key financial indicators will be crucial for both parties to make informed decisions and assess the financial health and prospects of Target Corp.

1. Balance Sheet:
The balance sheet is a snapshot of a company's financial position at a specific time. It provides a summary of Target Corp.'s assets, liabilities, and shareholders' equity. The following items should be highlighted:

a. Total Assets: This figure represents the value of Target Corp.'s resources, including cash, inventory, property, and investments. The first company interested in part ownership should pay close attention to this as it assesses the company's overall value.

b. Current and Long-term Liabilities: The first company must have a clear understanding of Target Corp.'s financial obligations and debt to assess the potential risks involved in acquiring part ownership.

c. Shareholders' Equity: This section indicates the value of the company's net assets – the residual interest of the owners in Target Corp.'s assets after deducting liabilities. The first company would be interested in evaluating the current ownership structure and potential dilution of their stake due to new ownership agreements.

2. Income Statement:
The income statement provides a summary of Target Corp.'s revenues, expenses, and overall profitability for a specified period. The following items should be highlighted:

a. Revenues: The first company offering a loan and the second company interested in part ownership would want to assess Target Corp.'s revenue performance. They should focus on revenue growth trends, profitability margins, and the contribution of different business segments to the overall revenue.

b. Operating Expenses: Both companies should carefully review Target Corp.'s operating expenses, such as cost of goods sold, marketing expenses, and administrative costs. The loan-providing company should evaluate whether the company's current operating expenses are manageable and if there is room for improved efficiency.

c. Net Income: This figure shows the company's profitability after accounting for all expenses. It provides insight into Target Corp.'s ability to generate profits and repay loans promptly.

3. Cash Flow Statement:
The cash flow statement details the cash inflows and outflows of the company during a specific period. The following items should be highlighted:

a. Cash Flow from Operating Activities: Both companies should focus on the net cash generated from Target Corp.'s core operations. This figure helps assess the company's ability to generate sufficient cash flow to cover operating expenses, debt repayments, and potential dividends.

b. Cash Flow from Investing and Financing Activities: The first company interested in a loan should pay attention to the company's capital expenditure plans and understand how Target Corp. intends to finance its expansion. The second company interested in part ownership should evaluate any significant cash inflows or outflows related to equity transactions.

By analyzing the information highlighted above from Target Corp.'s financial statements, both companies can make well-informed decisions aligned with their respective interests. It is recommended to engage with Target Corp.'s financial team for further clarification and discussion on any specific aspects of the financial statements.

Should you have any questions or require additional information, please do not hesitate to reach out.

Thank you for your attention.

Sincerely,

[Your Name]
[Your Position]