Dollar General Company Case Study

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Dollar General Company background: In October 1939 J.L Turner and Son opened a wholesale business in Scottsville, Kentucky, resulted in a successful retail store. In 1955, the first Dollar General store opened in Springfield, Kentucky, under the dollar-store concept, no item would cost more than a dollar. The pioneered dollar- store company was extremely successful with sales of $25.8 million. In 1968, following an Initial Public Offering (IPO) change its name Dollar General (DG) and went public does becoming the leader of the deep discount retailer and with the yellow Dollar General store sign (a popular symbol of value) with more than 8,000 stores in 35 states, in the southern and eastern United States, the Midwest, and the Southwest. DG…show more content…
The company acquisition represents a significant financial gain and rewards to CEOs and shareholders while the privatization makes the company not legally responsible to comply with all the accounting regulations and obligation to report operations or profit reports to the general public. The private companies are more flexible in reorganized their daily operations and have more freedom on how they recognize, manage and/or make business decisions. The private companies focus more on long-term goals and objectives to maintain…show more content…
The ratio analysis (exhibit 7) demonstrated that the performance of the company has declined. The relative lower growth in the revenues and profit margin. For the external assessment, we analyze the income statement comparison chart (exhibit 7). It indicates that Dollar General still lead in the net sales but its growth in sales dropped approximately 43.3% and their peer's competitors had growth. Dollar General profit margin comparison company ration analysis is lower than the others in 2007. As the data showed Dollar General Performance and profitability compared to the industry peers declined. The metrics to focus are on the internal aspects are sales per employee, net income per employee and operating cash flow per employee to understand why the decline in profits. On the external aspect, the important metrics are ROE, ROA, profit margin, asset turn over and working capital turn over, debt-to-equity ratio. This metric is a benchmark to understand the liquidity, solvency, and profitability of a company that facilitated the assessment of company

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