Financial Analysis of                                          (TSE:DOL)                                  November 30th, 2...
ContentsIntroduction.........................................................................................................
Established in 1992, Dollarama is one of the largest value retail stores in Canada. Presently,they employ over 13,000 empl...
additional costs in the future—they have a limited range in which to price products due to theirbranding as a “dollar” sto...
A horizontal analysis was performed by taking the value of key accounts from the fiscalyears 2009 to 2011. A horizontal an...
to the specified base. In Dollarama’s analysis the bases were sales for the income statement andtotal assets and total lia...
Dollarama’s acid test ratio has been consistently under 1, and has been steadily decreasing in 2010and 2011 – this suggest...
Dollarama’s debt ratio has declined, an analysis of its return on equity would not reflect profit-driven results, since th...
Common sized income statement compared with a key competitor                                              Dollarama Inc.  ...
earned ratio, and we can see that Dollar Tree is better at managing debt in general. In terms ofprofitability, Dollarama h...
improvement in the company’s solvency ratios, in particular the decline in its debt ratio, shows thatthe company is well p...
Comparative Income Sheet - Vertical Analysis                                                Dollarama Inc.                ...
Comparative Balance Sheet - Vertical Analysis                                                  Dollarama Inc.             ...
Comparative Balance Sheet - Horizontal Analysis                                                        Dollarama Inc.     ...
Key Financials                                                        12 months 12 months 12 months 12 months             ...
2010 Dollar Tree Annual Report. Rep. 17 Mar. 2011. Web.       <http://www.dollartreeinfo.com/common/download/download.cfm?...
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Financial Analysis of Dollarama (DOL)

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Financial Analysis of Dollarama (TSE:DOL) by Jawwad Siddiqui as of November 30th, 2011.

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Financial Analysis of Dollarama (DOL)

  1. 1. Financial Analysis of (TSE:DOL) November 30th, 2011 Team Members: Jawwad Siddiqui Zubair Kaisar Andy Han Bill MeiJawwad Siddiqui – siddiqui.m@queensu.ca Page 0
  2. 2. ContentsIntroduction...................................................................................................................................... 2Future Goals ................................................................................................................................................................ 3Financial Statement Analysis ............................................................................................................................... 4 Horizontal Analysis ............................................................................................................................................. 4 Vertical Analysis ................................................................................................................................................... 4 Liquidity Ratios ..................................................................................................................................................... 5 Solvency Ratios ..................................................................................................................................................... 6 Activity Ratios ........................................................................................................................................................ 6 Profitability Ratios ............................................................................................................................................... 6Benchmarking and Investment Ratios ............................................................................................................. 7 Common-Size Comparison ............................................................................................................................... 8 Ratio Comparison ................................................................................................................................................. 8 Dividend Yield........................................................................................................................................................ 9Highlights and Conclusions ................................................................................................................................... 9Appendix 1 – Financial Statements................................................................................................................. 11 Income Statement - Vertical Analysis ....................................................................................................... 11 Income Statement – Horizontal Analysis................................................................................................. 11 Balance Sheet – Vertical Analysis ............................................................................................................... 12 Balance Sheet- Horizontal analysis ............................................................................................................ 13Appendix 2 – Ratio Calculations....................................................................................................................... 14Appendix 3 ................................................................................................................................................................ 15Bibliography ............................................................................................................................................................. 15 Page 1
  3. 3. Established in 1992, Dollarama is one of the largest value retail stores in Canada. Presently,they employ over 13,000 employees and have 667 locations across the country. Dollarama providesits customers with a variety of consumer products, general merchandise, and seasonal items. Itscustomers are able to find a consistent shopping experience with affordable products in convenientlocations. The company is the market leader in dollar stores, and are constantly seekingopportunities to expand. Some of Dollarama’s competitors include Dollar Store With More, Great Canadian, and DollarGiant. Dollarama has performed well with respect to its competition; the company has five times asmany stores as their next best competitor Dollar Store With More. The Canadian dollar storeindustry can be characterized as monopolistic competition—each company offers different priceranges, merchandise mix, different consistencies of product offerings, store layouts, and locations.Dollarama’s strategy is to differentiate themselves from the rest of the market by holding a selectionof nationally branded products, offering a more consistent product selection, and offering a uniqueseasonal theme. Within the value retail industry in Canada, there is plenty of opportunity to grow. There are31,100 people per dollar store in Canada, whereas in the United States there are only 14,500 peopleper dollar store. However, even with the success of the business model there are always risks withinany corporation. An important risk that Dollarama faces is in managing their operating costs. Costfactors such as merchandise costs, foreign exchange rate fluctuations, lease costs, and inflation allcontribute to the profitability of the company. If any of these costs were to increase, it woulddecrease their profits, hurt their margins, and reduce their cash inflows. More recently, Dollaramahas increased their price points for certain products to $1.25, some to $1.50, and others to $2.00.This was implemented to offset any additional costs from the market that was beyond their control.However, there is no assurance that increasing the prices of certain products will continue to cover Page 2
  4. 4. additional costs in the future—they have a limited range in which to price products due to theirbranding as a “dollar” store. Beyond these risks, Dollarama Inc. as a business has performed very well. They haveemployed thousands of workers, offering a variety of convenient products and expanding byopening 43 new stores on average every year since 2002. Many analysts would argue thatDollarama is one of the most valuable businesses for the Canadian economy. Dollarama Inc. has experienced consistent growth and plan on building even more stores inCanada, particularly outside of Ontario and Quebec where most of their current operations arelocated. The company has 261 stores in Ontario and 221 stores in Quebec which represents roughly75% of their total retail outlets. There is plenty of opportunity to expand in western Canada as thereis not a clear market leader for dollar stores established in the west. The company will approach its expansion by hiring and training additional workers andretaining an increasing number of qualified employees. Retail outlets generally have a high rate oflabour turnover, and one of Dollarama’s key management strategies is to reduce their turnover rate.They believe that their employees are the most important part of their business, and investing morein them will yield great benefits in the long-run. Just as the company plans to invest in its employees, it is also planning to invest more in itswarehouses and distribution centers. Upgrading Dollarama’s warehouses and distribution centresin an efficient and economic manner is an important stepping stone to expanding their business. Dollarama achieves its highest sales during the Christmas holiday season, but also aroundother holidays such as Halloween, Valentine’s Day, and Easter. It aims to capitalize more heavily onthese trends to generate maximum revenues in an operating cycle. Page 3
  5. 5. A horizontal analysis was performed by taking the value of key accounts from the fiscalyears 2009 to 2011. A horizontal analysis is used to study percentage changes in key indicators ofthe company which tell us how the company is performing overall. The horizontal analysis of the income statement shows that total sales increased 15.1% in2010 and 30.4% in 2011. This was greater than the 11.9% increase in cost of sales in 2010 and25.2% increase in 2011. This results in Dollarama’s net income increasing consistently over the lasttwo years, at 570% in 2010 and 853.5% in 2011 respectively. This successful outcome is likely dueto the expanding nature of their business. With increased costs that come with expanding, there isalso opportunity for increased income. On the balance sheet, horizontal analysis shows that the total assets of the companydecreased by 3% in 2010 and 3.8% in 2011. The liabilities of the company have also decreased by43.9% in 2010 and 54.6% in 2011. This may be due to selling an asset, such as a piece of real estateor equipment on which there is debt (a liability) that is paid off when sold. In this scenario, thecompany would first sell the asset and receive cash. This increases cash (asset) and decreasesequipment (asset). Then the cash is used to pay the outstanding debt. This decreases debt (liability)and decreases cash (asset). However, due to the small decrease in assets compared to the largedecrease in liabilities, a more likely scenario is that the company is using excess cash generatedfrom operations to pay off its debt, explaining the large decrease in liabilities on the company’sbalance sheet. A vertical analysis was performed from the fiscal years 2010 to 2011. A vertical analysis isused to analyze a financial statement that depicts the relationship between each statement account Page 4
  6. 6. to the specified base. In Dollarama’s analysis the bases were sales for the income statement andtotal assets and total liabilities and shareholders’ equity for the balance sheet. The vertical analysis on the consolidated income statement shows an increase in thepercentage of net earnings from 2010 to 2011. This is due to the decrease in the percentage of costof sales from 2010 to 2011 (from 87.8% to 85.5%). The operating income was 2.3% higher bymargin in 2011. The lower percentage ratio of cost of sales to sales in 2011 indicates that Dollaramaused their resources efficiently and had a better fiscal year in 2011 than in 2010. The specified baseto compare each account from the statement is revenue. Vertical analysis on the consolidated balance sheet shows that cash and cash equivalentsholdings in percentage ratio to the assets has decreased (from 7% to 4.05). This has a directcorrelation with long-term debt (liability) decreasing significantly (from 35.4% to 26.5%). Overallliabilities have decreased from 53.5% to 43.7% in ratio to the total liabilities and shareholders’equity. This indicates that Dollarama has paid off a lot of their debt with the cash they had availablein 2011. Overall the specified bases to compare each account from the statement are total assets andtotal liabilities and shareholders’ equity. Dollarama’s working capital increased dramatically from 58.38 million in 2008 to 258.26million in 2009, then dropped significantly to 178.51 million in 2010 and later grew to 182.74million in 2011. The working capital is a measure of a company’s operating liquidity – it ensuresthat the company will have sufficient funds to cover short-term debt and future operating expenses.Dollarama’s significant growth in working capital indicates that the company has much flexibility itsoperating initiatives. The acid test ratio in 2008 was very low at 0.22, then increased dramatically to 0.75 in 2009and slowly diminished to 0.63 and 0.44 in 2010 and 2011 respectively. The acid test ratio illustratesa company’s ability to cover immediate liabilities with short-term assets not including inventory. Page 5
  7. 7. Dollarama’s acid test ratio has been consistently under 1, and has been steadily decreasing in 2010and 2011 – this suggests that much of Dollarama’s assets are dependent on inventory; the companywill be unable to pay off current liabilities without the sale of its inventory. Dollarama’s debt ratio has be decreasing from 0.948 in 2008 to 0.437 in 2009; as a measureof leverage, the declining debt ratio shows that Dollarama has been de-leveraging themselves. Whilethis may be beneficial in terms of reducing interest expenses and minimizing risk exposure to thecredit markets, failing to leverage enough of the business may lead to lower returns. The times-interest earned ratio reflects this deleveraging as well—it has increased steadily from 1.31 in 2008to 5.91 in 2011, showing that Dollaramas operating income is increasing much faster than itsinterest expense and is able to finance expansion at a rate that outstrips its cost of debt. Dollarama’s inventory turnover increased steadily from 2.92 to 3.03 to 3.33 in 2009, 2010,and 2011 respectively. The inventory turnover ratio demonstrates how many times the company’sinventory is sold and replaced over time. In Dollarama’s case, growing inventory turnover ratiossuggest that inventory is being sold faster. The accounts receivable turnover cannot be calculatedbecause the company does not have any credit sales. Dollarama’s return on sales increased from 5.15% in 2008 to 8.23% in 2011, with adecrease to –1.42% in 2009 when the company reported a net loss. The return on sales is animportant measure of the company’s ability to control its costs, and a higher return representsgreater efficiency. Dollarama’s strong growth in return on sales over the past four years shows thatthe company is becoming more profitable and is able to grow revenues faster than expenses. Since Page 6
  8. 8. Dollarama’s debt ratio has declined, an analysis of its return on equity would not reflect profit-driven results, since the company’s equity base has increased relative to its total assets. Dollar Tree (NASDAQ:DLTR), with 85 corporate stores in Canada, can be regarded as theonly significant single competitor for Dollarama.1 The next most significant competitor as stated intheir annual reports is “Your Dollar Store and More”, which is not publicly traded and uses afranchise business model unlike Dollarama’s corporate owned stores. Furthermore, on November2010, Dollar Tree acquired 86 stores of Canadian Dollar Giant stores; this makes it clear thecompany has plans in the near future to further penetrate the Canadian market. Beyond that, thereare no large identifiable competitors with which to compare Dollarama. The rest of the dollar-storemarket is highly fragmented and consists of private chains, local businesses, and mom-and-popdollar stores—thus, no industry averages are publicly available. We cannot compare Dollarama tomore general retail stores and department chains such as Wal-Mart since their target markets arenot the same and they do not have the same primary driver of revenues and different businessmodels. Wall-Mart’s core capability comes from its supply chain, while Dollarama’s core capabilitycomes from its ability to maintain margins even at the discount level. Due to the reasons above andthe similarities between Dollarama and Dollar Tree’s business model, we have chosen Dollar Tree asthe key competitor to compare Dollarama against.1(Pett, D (2010, Oct 13th) Dollarama should with stand competition from Dollar Tree, National Post, pp. FP. 9.Retrieved from http://search.proquest.com/docview/758535937?accountid=6180) Page 7
  9. 9. Common sized income statement compared with a key competitor Dollarama Inc. Common-Size Income Statement (Adapted) for Comparison With a Key Competitor For the years ended as Indicated Dollar Tree Inc (Adapted) Dollar Store Inc (Adapted) January 30th, 2011 January 29th, 2011 Sales 100.00% 100.00% COGS, operating and other expenses 64.51% 57.89% Income before Income Tax 10.71% 12.04% Income Tax Expense 3.95% 2.45% Net Earnings 6.75% 8.23% Common-Size Income Statement Comparison with Dollar Tree reveals favourable conditionsfor Dollarama. Despite the larger operations of Dollar Tree, Dollarama is able to operate atcomparatively better margins. Dollarama’s COGS is 57.9%, 6.6% lower than Dollar Tree. This meansthat Dollarama is able to operate much more cost efficiently than Dollar Tree (Appendix 3), and thisresult is especially significant when we consider Dollar Tree should be able to minimize cost moreefficiently due to their size with economies of scale. This cumulatively puts Dollarama’s IBT and NetEarnings at a better position as well. Thus, despite the conflicting factors in comparing Dollaramawith Dollar Tree, Dollarama is performing comparatively better than its competitor. Comparisons of selected ratios for the fiscal year ending 2011 Dollar Tree Dollarama Ratios Acid Test Ratio 0.91 0.44 Inventory Turnover 5.12 3.33 Debt Ratio 0.18 0.44 Times Interest Earned Ratio 112.70 5.91 Return on Sales 6.75% 8.23% Return on Assets 16.89% 8.91% Gross Margin 35.49% 42.11% We can get a better picture of the performance of both companies by comparing key ratios.Dollar Tree has a higher acid test ratio than Dollarama, indicating that it is more liquid and moreable to pay short-term debts, and also has a lower debt ratio, which means the company is lessleveraged than Dollarama is. Combine this with Dollar Tree’s significantly higher times interest Page 8
  10. 10. earned ratio, and we can see that Dollar Tree is better at managing debt in general. In terms ofprofitability, Dollarama has greater gross margins and greater return on sales, meaning that thecompany is more cost-efficient and is better than managing costs than Dollar Tree is. However,Dollarama’s return on assets is lower than Dollar Tree’s ROA, and indicates that although Dollaramagenerates greater profits per sale, it has lower asset utilization and requires more capital togenerate the same dollar of profit. Dollarama also has a lower inventory turnover than Dollar Tree,meaning that Dollar Tree turns to sell more aggressively throughout its operating cycle. Dollarama’s increasing P/E Ratio is reflective of its growing EPS and financial health. Thecompany’s 2011 P/E ratio of 15.25 means that investors are willing to pay $15.25 for each $1 of netincome that the company generates. However, this value is low when compared to Dollar Tree’s P/ERatios of 34.15, 38.75, and 45.96 in 2009, 2010, and 2011 respectively. This result can beinterpreted in two ways, either that Dollar Tree is more valuable to investors than Dollarama is, orthat Dollarama is being undervalued and a buying opportunity exists in investing in Dollarama. Theinterpretation is up to the individual investor and whether he/she wants to be optimistic orpessimistic. Dollarama’s dividend policy on its Annual Information Form states “The Corporation has notdeclared or paid any cash dividends on its Common Shares to date, and does not currently intend topay any cash dividends on its Common Shares. The Corporation currently intends to use its earningsto fund future operations, to finance the expansion of its business and to reduce indebtedness”.Therefore, it does not allow us to consider this ratio for analysis purposes. Dollarama has shown to be a profitable company that has been steadily growing for the pastthree years. The company’s liquidity ratios indicate strong baseline financial health; the steady Page 9
  11. 11. improvement in the company’s solvency ratios, in particular the decline in its debt ratio, shows thatthe company is well positioned enough to pay off a large amount of its long-term debt. However,there is one predominant red flag in Dollarama’s liquidity ratio: the year-over-year decrease in thecompany’s acid-test ratio. In 2008, the ratio was very low at 0.22 and increased dramatically to 0.75in 2009. However, it diminished in subsequent years to 0.63 and 0.44 in 2010 and 2011respectively. This year-over-year decrease in Dollarama’s acid test ratio shows that that company isslowly becoming less able to cover immediate liabilities with short-term assets sans inventory—thismeans that in the near future, Dollarama may be unable to cover its accounts payables and otherexpenses when they come due in the short-term. In terms of overall profitability, Dollarama hasshown healthy margins that outstrip its competitors, its gross margin percentage of 42.11% meansthat for every $1 item that Dollarama sells, the company retains 42 cents for paying itsadministrative costs. This is higher than Dollar Tree’s 35.49%--reflecting Dollarama’s 7 centadvantage over its competitor. When products in the discount industry sell for $1 or $2, this 7 centdifference is a significant amount that puts Dollarama at the top of the industry. Page 10
  12. 12. Comparative Income Sheet - Vertical Analysis Dollarama Inc. Consolidated Statement of Earnings (Adapted) For the fiscal year ended February 1 to January 30 Amount Percentage of Amount Percentage of (in thousands of dollars) 2011 Sales 2010 SalesSales $ 1,419,914 100% $ 1,253,706 100%Cost of Sales and ExpensesCost of Sales $ 906,982 63.9% $ 810,624 64.7%General, admin and operating expenses 278,952 19.6% 264,784 21.1%Amortization 28,508 2.0% 24,919 2.0% $ 1,214,442 85.5% $ 1,100,327 87.8%Operating Income $ 205,472 14.5% $ 153,379 12.2%Financial Costs, net 34,460 2.4% 51,101 4.1%Earnings Before Income Taxes $ 171,012 12.0% $ 102,278 8.2%Provision for Income Taxes 54,185 3.8% 29,415 2.3%Net Income $ 116,827 8.2% $ 72,863 5.8% Comparative Income Sheet - Horizontal Analysis Dollarama Inc. Consolidated statement of Earnings (Adapted) For the fiscal year ended February 1 to January 30 Increase (Decrease) (in thousands of dollars) 2011 2010 2009 From 2010 to 2011 From 2009 to 2010 Amount % Amount %Sales $ 1,419,914 $ 1,253,706 $ 1,089,011 166,208 13.3% 164,695 15.1%Cost of Sales and ExpensesCost of Sales $ 906,982 $ 810,624 $ 724,157 96,358 11.9% 86,467 11.9%General, admin and operating expenses 278,952 264,784 214,596 14,168 5.4% 50,188 23.4%Amortization 28,508 24,919 21,818 3,589 14.4% 3,101 14.2% $ 1,214,442 $ 1,100,327 $ 960,571 114,115 10.4% 139,756 14.5%Operating Income $ 205,472 $ 153,379 $ 128,440 52,093 34.0% 24,939 19.4%Financial Costs, net 34,460 51,101 131,654 (16,641) -32.6% (80,553) -61.2%Earnings Before Income Taxes $ 171,012 $ 102,278 $ (3,254) 68,734 67.2% 105,532 -3243.1%Provision for Income Taxes 54,185 29,415 12,250 24,770 84.2% 17,165 140.1%Net Income $ 116,827 $ 72,863 $ (15,504) 43,964 60.3% 88,367 -570.0%Jawwad Siddiqui – siddiqui.m@queensu.ca Page 11
  13. 13. Comparative Balance Sheet - Vertical Analysis Dollarama Inc. Consolidated Balance Sheet (Adapted) As at January 30 of each year indicated Amount Percentage of Total Amount Percentage of Total (in thousands of dollars) 2011 Assets 2010 AssetsASSETSCurrent AssetsCash and cash equivalents $ 53,129 4.05% $ 93,057 7.0%Accounts receivable 1,821 0.1% 1,453 0.1%Merchandise Inventories 258,905 19.75% 234,684 17.7%Deposits and Prepaid Expenses 4,658 0.36% 4,924 0.4%Derivatives financial instrument 838 0.06% 3,479 0.3% $ 319,351 24.4% $ 337,597 25.5%Long-term AssetsProperty and Equipment $ 152,081 11.6% $ 138,214 10.5%Goodwill 727,782 55.5% 727,782 55.0%Other intangible assets 111,917 8.5% 113,302 9%Derivative financial instruments - 0 5,342 0.4%Total Assets $ 1,311,131 100.0% $ 1,322,237 100%LIABILITIES & SECurrent LiabilitiesAccounts Payable $ 39,577 3.0% $ 31,694 2.40%Accrued Expenses and other 64,281 4.9% 46,825 3.54%Income taxes payable 12,830 1.0% 23,445 1.77%Current Portion of long-term debt 14,292 1.1% 1,925 0.15%Derivative financial instruments 5,630 0.4% 55,194 4.17% $ 136,610 10.4% $ 159,083 12.03%Long-term LiabilitiesLong-term debt $ 347,763 26.5% $ 468,591 35.44%Due to shareholders - 0% - 0%Future income taxes 54,906 4.2% 49,879 3.77%Other liabilities 33,644 2.6% 29,988 2.27%Total Liablities $ 572,923 43.70% $ 707,541 53.51%Shareholders EquityCapital Stock $ 523,295 39.91% $ 518,430 39.21%Contributed surplus 16,066 1.23% 17,472 1.32%Retained earnings 205,712 15.69% 88,885 6.72%Accumulated other CI (6,865) -0.52% (10,091) -0.76%Total Shareholders Equity $ 738,208 56.30% $ 614,696 46.49%Jawwad Siddiqui – siddiqui.m@queensu.ca Page 12
  14. 14. Comparative Balance Sheet - Horizontal Analysis Dollarama Inc. Consolidated Balance Sheet (Adapted) As at January 30 of each year indicated Increase (Decrease) (in thousands of dollars) 2011 2010 2009 From 2010 to 2011 From 2009 to 2010ASSETS Amount % Amount %Current AssetsCash and cash equivalents $ 53,129 $ 93,057 $ 66,218 (39,928) -42.9% 26,839 40.5%Accounts receivable 1,821 1,453 2,998 368 25.3% (1,545) -51.5%Merchandise Inventories 258,905 234,684 249,644 24,221 10.3% (14,960) -6.0%Deposits and Prepaid Expenses 4,658 4,924 4,710 (266) -5.4% 214 4.5%Derivatives financial instrument 838 3,479 33,175 (2,641) -75.9% (29,696) -89.5% $ 319,351 $ 337,597 $ 356,745 (18,246) -5.4% (19,148) -5.4%Long-term AssetsProperty and Equipment $ 152,081 $ 138,214 $ 129,878 13,867 10.0% 8,336 6.4%Goodwill 727,782 727,782 727,782 - 0.0% - 0.0%Other intangible assets 111,917 113,302 115,210 (1,385) -1.2% (1,908) -1.7%Derivative financial instruments - 5,342 33,423 (5,342) -100.0% (28,081) -84.0%Total Assets $ 1,311,131 $ 1,322,237 $ 1,363,038 (11,106) -0.8% (40,801) -3.0%LIABILITIES & SECurrent LiabilitiesAccounts Payable $ 39,577 $ 31,694 $ 39,729 7,883 24.9% (8,035) -20.2%Accrued Expenses and other 64,281 46,825 37,760 17,456 37.3% 9,065 24.0%Income taxes payable 12,830 23,445 5,692 (10,615) -45.3% 17,753 311.9%Current Portion of long-term debt 14,292 1,925 15,302 12,367 642.4% (13,377) -87.4%Derivative financial instruments 5,630 55,194 - (49,564) -89.8% 55,194 nmf $ 136,610 $ 159,083 $ 98,483 (22,473) -14.1% 60,600 61.5%Long-term LiabilitiesLong-term debt $ 347,763 $ 468,591 $ 806,384 (120,828) -25.8% (337,793) -41.9%Due to shareholders - - 256,077 0 0.0% (256,077) -100.0%Future income taxes 54,906 49,879 71,759 5,027 10.1% (21,880) -30.5%Other liabilities 33,644 29,988 28,098 3,656 12.2% 1,890 6.7%Total Liablities $ 572,923 $ 707,541 $ 1,260,801 (134,618) -19.0% (553,260) -43.9%Shareholders EquityCapital Stock $ 523,295 $ 518,430 $ 35,304 4,865 0.9% 483,126 1368.5%Contributed surplus 16,066 17,472 10,354 (1,406) -8.0% 7,118 68.7%Retained earnings 205,712 88,885 16,022 116,827 131.4% 72,863 454.8%Accumulated other CI (6,865) (10,091) 40,557 3,226 -32.0% (50,648) -124.9%Total Shareholders Equity $ 738,208 $ 614,696 $ 102,237 123,512 20.1% 512,459 501.2%Total Liabilities and SE $ 1,311,131 $ 1,322,237 $ 1,363,038 (11,106) -0.8% (40,801) -3.0% Page 13
  15. 15. Key Financials 12 months 12 months 12 months 12 months Feb 03, Feb 01, Jan 31, Jan 30, 2008 2009 2010 2011 (Dollar amounts in millions, except EPS) Current Assets 243.674 356.745 337.597 319.351 Working Current Liabilities 185.291 98.483 159.083 136.610 Capital Working Capital $ 58.383 $ 258.262 $ 178.514 $ 182.741 Cash and Equivalents 26.289 66.218 93.057 53.129 Accounts Recievable 2.798 2.998 1.453 1.821Acid Test Short-term Investments 11.519 4.710 4.924 4.658 Ratio Current Liabilities 185.291 98.483 159.083 136.610 Acid Test Ratio 0.219 0.751 0.625 0.436 Cost of Goods Sold 640.885 655.176 734.347 822.018Inventory Inventory 198.500 249.644 234.684 258.905Turnover Average Inventory - 224.072 242.164 246.795 Inventory Turnover - 2.924 3.032 3.331 Total Liabilities 1,138.500 1,260.800 707.500 572.900Debt Ratio Total assets 1,200.500 1,363.000 1,322.200 1,311.100 Debt Ratio 0.948 0.925 0.535 0.437 Time- Income from operations 124.600 131.400 167.000 205.500Interest- Interest Expense 95.100 86.900 82.200 34.800 Earned Times-Interest ER 1.310 1.512 2.032 5.905 Net Income 50.000 (15.500) 72.900 116.800Return on Total Revenue 972.400 1,089.000 1,253.700 1,419.900 Sales Return on Sales 5.14% -1.42% 5.81% 8.23% Net Income 50.000 (15.500) 72.900 116.800Return on Total Assets 1,200.500 1,363.000 1,322.200 1,311.100 Assets Return on Assets 4.16% -1.14% 5.51% 8.91% Net Income 50.000 (15.500) 72.900 116.800 Earnings Weighted Avg. Common Shares Outstanding 42.500 43.900 51.500 73.200Per Share Earnings Per Share $ 1.18 $ (0.35) $ 1.42 $ 1.60Jawwad Siddiqui – siddiqui.m@queensu.ca Page 14
  16. 16. 2010 Dollar Tree Annual Report. Rep. 17 Mar. 2011. Web. <http://www.dollartreeinfo.com/common/download/download.cfm?companyid=DLTR&fil eid=468412&filekey=8337862E-9566-45F4-84AB- 06EC21AB6A06&filename=DollarTree2010AnnRpt.pdf>.Annual Information Form. Rep. Dollarama Inc., 29 Apr. 2011. Web. <http://www.dollarama.com/wp-content/uploads/2011/05/Annual-Information- Form.pdf>.Dollar Tree Inc. Financial Information. Rep. Capital IQ. Web. 25 Nov. 2011. <https://www.capitaliq.com/home.aspx>.Dollar Tree, Inc. (NasdaqGS:DLTR). Rep. Capital IQ. Web. 28 Nov. 2011."Dollar Tree Investor Relations - Key Shareholder Information & Financial Reports." Dollar Tree, Inc. Corporate Site - Investor Relations, Vendor & Real Estate Partners. Dollar Tree Inc. Web. 30 Nov. 2011. <http://www.dollartreeinfo.com/investors/>.Dollarama. Dollarama Inc. Web. 30 Nov. 2011. <http://www.dollarama.com/home/>.Dollarama Inc. Financial Information. Rep. Capital IQ. Web. 25 Nov. 2011. <https://www.capitaliq.com/home.aspx>.Jawwad Siddiqui – siddiqui.m@queensu.ca Page 15

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