1) What is Dollarama’s largest current asset? Elaborate on what this has to do with their operations. Dollarama’s largest current asset is merchandise inventory. Current assets are items owned by an entity can be converted into cash within one year. Merchandise inventory is an extremely important part of this company as it is intended for sale to its customers. Dollarama’s operations are based on the annual sale of the merchandise. Dollarama is a retail store whose main source of income is by the sales to the customers of their merchandise. This is why it is expected to convert into cash within one year. Dollarama’s business is adjusted according to the sales of the merchandise. 2) What is Dollarama’s largest non-current asset? What are …show more content…
Non-current assets are items owned by an entity that cannot be converted into cash within one year. Goodwill is the value of the company’s reputation, location, and brand. Goodwill is an intangible asset. It appears on the balance sheet when a company buys another and pays more for the company’s intangible assets than tangible assets. There are three sources of goodwill of Dollarama Inc. One is the knowledge and business insight. The expertise of workplace and the value of human resource is included under the goodwill factor of the balance sheet. Another is the reputation of the product and brand equity and loyalty. Dollarama is a household name which generates positivity and intern is a factor that is valuable to boost the profit of the company. The last sourse is the economic environment of the company. This is the measurement of the levels of investor confidence which influences the value of a firm in the …show more content…
The inventory was sold and replaced 5.49 times in the year of 2013. This ratio is high. This means that the demand for the Dollarama’s products is high. This indicates that Dollarama Inc.’s performance in the fiscal year of 2013 is high. 5) Discuss the debt to equity ratio and what it says about how Dollarama finances its operations? The debt to ratio is a ratio that compares a firms total liabilities and shareholders’ equity. It shows the proportion of the amount of money invested by the business owners as well as external entities. Debt to Equity Ratio = Total Liabilities/Shareholders’ Equity = $80,994/$931,490 = 0.087 The debt to equity ratio of Dollarama Inc. for the year of 2013 is 0.087. The debt to equity ratio is lower than one which means that the debt is less than the owner’s equity. The business is geared in the positive direction. The risk factor of the external lenders and investors of the company is less. Dollarama has a strong financial interest in the business than other external lenders. Dollarama operates by using less of the exteral lenders money and more of its own to run the
I’ve got some feedback on Barron’s draft: 36-521.02.B – This subsection says we can hold the patient while the screening agency (SA) reviews the application, which is good. However, we want to hold the patient while we make the application to the SA, too. We’d be fine with a timeframe for the hospital to make the application. 36-521.02.D – We have two comments here. 1) As drafted, the subsection says that if a Certificate of Hold is issued by the SA then a hospital can hold a patient for 9 hours, once medically cleared, while waiting for transport to the SA.
Financial statements are an important part of any business. They provide an overview of a companies’ financial health and standings by accurately analyzing an organization’s balance sheet, income, cash flow, and equity statements. Furthermore, the accuracy of these documents permits companies to make important decisions concerning future investments, planning and forecasting. For this essay, I will break down Target’s 2016 financial statement to research their inventory method and why it fits their business model. Additionally, I will determine their net purchases by using the cost of goods formula and finally I will calculate their inventory turnover and days sales inventory in comparison to Kohl’s corporation.
Non-current assets obtained for continuing use over long period of time that more than one year. For example, building, vehicles and so on. While current assets that likely to be changed within short term between one year. For example, bank, cash, trade-receivables and so on. Liability is company’s
This paper will analyze the financials of two businesses in the in the consumer staples segment, more specifically the alcoholic beverage industry. The alcoholic beverage industry consists of beer, wine, and distilled spirits. Within each category there are many different distributors. Some of these companies are small and only serve a small region. While others have a diverse product line and serve their product not only nationally but globally.
Firms with excessive liabilities may run into severe trouble, even if they are otherwise successful entities. In finance, the term leverage refers to the ration between the firm 's liabilities and equity and is calculated by dividing total liability by shareholder equity. Note that some analysts prefer to use only long-term liabilities, which are payment obligations coming due in one year or more, when calculating leverage. The more common leverage formula, however, incorporates all liabilities. If stockholder equity is less than total liability, the firm 's leverage ratio will be greater than 1.
Dollar Tree Inc. The Dollar Tree the store that’s taking the value of a dollar to a whole new level. Dollar Tree products all of their products for a single dollar or less. The company is constantly growing and devising new ways to provide more products for only a dollar. Dollar Tree has never seen a year without profit in its existence.
Apply the concept of VRIN to analyse its value-creating ability. All resources that an organization has may not have strategic relevance. Only certain resources are capable of being an input to a value creating strategy which put the organization in a position of competitive advantage. Great brand identity gives Disney's parks an edge over its competitors. Applying the concept of VRIN (valuable, rare, inimitable, non-substitutable) on Disneyland theme parks- • Valuable-
Dollar Tree has been quite successful with its growth and acquisition, however as a dollar store, Dollar Tree must ensure their costs are controlled in order to be profitable.
One of the reasons is wear and tear. When the more noncurrent asset that we used, the noncurrent asset will wear out. For example, motor vehicle is known as noncurrent asset. If we use the van have more delivery, the van will wear out very fast, the tyres and the van component also need to repairs. Obsolescence is also a reason for depreciation.
They have to make sure that the sale of the asset to be happened likely within and year and also to assure to have no withdrawing. Another asset that relies on numerous assumptions is their brand. Apparently, evaluating fair value for the brand not a simple and straight forward task to be carried out . The consolidated balance sheet shows that the fair value of the brand is $4963 million as of the end of year 2014 and it was a decreasing result if compared to the figure in end of 2013 which is $5013 million.
A-Four support activities: 1- firm infrastructure and finance : -Strong brand, product, marketplace solution, delivery and support. (brand value from 35$ in 1973 to 10.7 billion in 2014 ). -Empowerment of top management –geographic structure. -Low debt, short term debt 2.9 billion, and long term debt 1.1 billion. Cash in hand 2.2 billion.
Strengths: Are the internal factors that influence positively such as the liquidity requirements or employment experience and efficiency. And they have a way to normalize promote an increase professionalism and corporate
Now, Cost of equity (Re) = 8.95% + 1.21×7.43% = 17.94% While determining the cost of debt we again used 8.95%,30 year U.S. Government Interest Rate given in Table B as the risk free rate plus 1.10% debt rate premium above Government rate, which is given in Table A. Cost of debt (Rd) = 8.95% + 1.10% =
Zara invests around .3 % of its revenues in advertising as compared to its competitors who invest around 3-5 % of their revenues in advertising. This increases its availability of funds for investments in design and in-house manufacturing rather than cutting the cost on these crucial operations. The lack of advertising is compensated by placing the stores at popular locations with good footfall and thus raising the customer inflow by the virtue of its store locations. Zara has been able to maintain a loyal relationship with its
• High investments in supply chain management. Currently Flipkart has strong delivery network across 27 cities. • Consumer insights for better demand forecasting. Constantly soliciting suggestions on new products to the customers. • Easy and fast payment system - 24*7 operations.